A Right Unexercised Is A Right Lost?: Abolishing Antidumping in Regional Trade Agreements

NOTES
A RIGHT UNEXERCISED IS A RIGHT LOST?:

ABOLISHING ANTIDUMPING IN REGIONAL
TRADE AGREEMENTS
RYAN FARHA*
This Note considers the six regional trade agreements (RTAs) in which
antidumping is prohibited: the Australia-New Zealand Closer Economic Rela-
tions Trade Agreement, Canada-Chile Free Trade Agreement, European Free
Trade Association (EFTA)-Singapore Free Trade Agreement, EFTA-Chile Free
Trade Agreement, and the Closer Economic Partnership Arrangements between
China and Hong Kong and China and Macau. Using these agreements as case
studies, the Note argues that, although antidumping provisions generally serve
an important role in RTAs, in certain extraordinary cases, antidumping is
neither necessary nor useful. These cases arise where the RTA parties have a very
limited trading relationship, simply do not use trade remedies, or have an
otherwise extraordinary relationship. In any case, antidumping has become an
unexercised right as between the parties. The Note thus rejects alternative theories
that look to decreased opportunities for arbitrage, trade “attrition,” or a “broader
push for integration” to explain the parties’ willingness to prohibit antidump-
ing. Finally, in these cases, competition law, although seldom utilized, serves an
important function by serving as a backstop against potential future dumping
activity.
TABLE OF CONTENTS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
II. THE LAW GOVERNING REGIONAL TRADE AGREEMENTS AND
TRADE REMEDY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 216
A. Regional Trade Agreements. . . . . . . . . . . . . . . . . . . . . . . . 216
B. Trade Remedy Provisions in RTAs. . . . . . . . . . . . . . . . . . . 218
C. Trade Remedy Configurations in RTAs . . . . . . . . . . . . . . . 219
D. Antidumping and Antitrust: Common Enemies, Divergent
Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
III. REGIONAL TRADE AGREEMENTS IN WHICH ANTIDUMPING IS
PROHIBITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
* J.D., Georgetown University, expected May 2013; Fulbright Scholar, 2008; B.A., Vanderbilt
University, 2008. The author thanks Professors Charles Verrill and Timothy Brightbill for their
comments and support as well as the editors and staff of the Georgetown Journal of International Law
for their assistance. © 2013, Ryan Farha.
211
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
A. Australia-New Zealand Closer Economic Relations Trade

Agreement (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224
B. Canada-Chile Free Trade Agreement (1997) . . . . . . . . . . . . 227
C. Agreements of the European Free Trade Association . . . . . . . 230
1. EFTA-Singapore Free Trade Agreement (2003) . . 231
2. EFTA-Chile Free Trade Agreement (2004) . . . . . . 232
D. The Closer Economic Partnership Arrangements Between
China and Hong Kong and China and Macau (2004) . . . . 234
IV. ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236
A. Some Preliminary Observations . . . . . . . . . . . . . . . . . . . . . 237
B. Explaining the Prohibition of Antidumping . . . . . . . . . . . . 237
1. The Arbitrage Theory . . . . . . . . . . . . . . . . . . . . . . 237
2. The “Attrition” Theory. . . . . . . . . . . . . . . . . . . . . . 240
3. The “Broader Push for Integration” Theory . . . . . 241
C. Explaining the Disuse of Competition Law in the Wake of
the Prohibition of Antidumping . . . . . . . . . . . . . . . . . . . . . 242
1. Competition Law May Not Be Well-Suited to
Tackle Dumping . . . . . . . . . . . . . . . . . . . . . . . . . . 242
2. Uncharted Territory for Competition Authorities . 243
3. Antidumping and Competition Are Unrelated . . . 244
D. Antidumping is a Dead Letter and May Thus Be Replaced
by Competition Law, “a Weaker Form of Control” . . . . . . . . 244
1. Economic and Legal Reasons for the Redundancy
of Antidumping . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
2. ANZCERTA and the CEPAs: Extraordinary
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246
3. Competition Law: a “Backstop” Against the
Possibility of Dumping . . . . . . . . . . . . . . . . . . . . . . 246
E. Implications for Future RTAs . . . . . . . . . . . . . . . . . . . . . . 247
V. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248
I. INTRODUCTION
Regional trade agreements (RTA) have proliferated in recent years.1
Article XXIV of the General Agreement on Tariffs and Trade (GATT)
in large part regulates these agreements by requiring that “duties and
other restrictive regulations of commerce” be eliminated on “substan-
1. See generally Rafael Leal-Arcas, Proliferation of Regional Trade Arrangements: Complementing or

Supplanting Multilateralism?, 11 CHI. J. INT’L L. 597 (2011). From the creation of the World Trade
Organization in 1995 until 2010, there were more than 300 regional trade agreement notifica-
tions. See id. at 601.
212 [Vol. 44
ABOLISHING ANTIDUMPING IN REGIONAL TRADE AGREEMENTS
tially all the trade between constituent territories” to RTAs, at least with
respect to trade originating in such territories.2 However, parties to
RTAs face a dilemma parallel to that facing members of the World
Trade Organization (WTO). As the parties strive to fulfill the objectives
of RTAs under Article XXIV, namely, “to facilitate trade between the
constituent territories and not to raise barriers,”3 they often feel the
need to resort to the use of trade remedies to combat perceived
economic threats engendered by their trade posture.4
Indeed, given the objective of RTAs, one might expect such agree-
ments to prohibit the use of contingent protection—antidumping and
countervailing duties and safeguards—against other parties within the
resulting free trade area. As noted in one study, “[s]ince RTAs have the
objective of dismantling all barriers to intra-regional trade, one natural
expectation is that RTA members will abolish the use of trade remedies
against intra-bloc trade.”5 However, this has not occurred in practice.
RTAs include a bevy of configurations governing the use of trade
remedies within free trade areas.6 Some agreements flat-out prohibit
the use of a particular remedy, for example, antidumping.7 Other
2. See General Agreement on Tariffs and Trade art. XXIV:8, Oct. 30, 1947, 61 Stat. A-11,
55 U.N.T.S. 194 [hereinafter GATT].
3. See id. art. XXIV:4.
4. See, e.g., Citric Acid and Certain Citrate Salts from Canada and China, Inv. Nos. 701-TA-
456, 731-TA-1151-1152, USITC Pub. 4067, at *1 (May 2009) (Final) (finding material injury to an
industry in the United States caused by Canadian imports of citric acid and certain citrate salts
at less than fair value); Seamless Refined Copper Pipe and Tube from China and Mexico,
Inv. Nos. 731-TA-1174-1175, USITC Pub. 4193, at *1 (Nov. 2010) (Final) (finding threat of
material injury to an industry in the United States caused by Mexican imports of seamless refined
copper pipe and tube). But see North American Free Trade Agreement art. 102, U.S.-Can.-Mex.,
Dec. 17, 1992, 32 I.L.M. 289 (1993) (preamble to chapter 10); 32 I.L.M. 605 (1993) (chapter 10 to
Errata table) [hereinafter NAFTA] (declaring that an objective of NAFTA is to “eliminate barriers
to trade in, and facilitate the cross-border movement of, goods and services between the territories
of the Parties”).
5. Robert Teh et al., Trade Remedy Provisions in Regional Trade Arrangements 5 (World Trade
Org., Working Paper No. ERSD-2007-03, 2007); see also GABRIELLE MARCEAU, ANTIDUMPING AND
ANTI-TRUST ISSUES IN FREE-TRADE AREAS 187 (1995) (“[O]ne may wonder why the ‘discipline’ of
antidumping duties is necessary when the tariffs that they are supposed to protect have disap-
peared, as they do within a free-trade area.”).
6. See generally Thomas Prusa, Trade Remedy Provisions, in PREFERENTIAL TRADE AGREEMENT
POLICIES FOR DEVELOPMENT: A HANDBOOK 179 (Jean-Pierre Chauffour & Jean-Christophe Maur
eds., 2011).
7. See, e.g., Free Trade Agreement between the EFTA States and the Republic of Chile art. 18,
June 26, 2003, available at http://www.efta.int/free-trade/free-trade-agreements/chile/fta.aspx
[hereinafter ECFTA] (prohibiting antidumping).
2012] 213
RTAs allow the use of a certain remedy in a proscribed manner,8 and

some agreements allow the use of remedies without any guidelines.9
Furthermore, many RTAs do not demonstrate consistency among the
different trade remedy provisions, and in some cases one remedy is
prohibited, another is allowed but regulated, and a third is totally
unregulated.10
From this morass has emerged one especially interesting manifesta-
tion of RTAs: those in which antidumping is completely prohibited. In
particular, this feature is found in agreements between Australia and
New Zealand, Canada and Chile, the People’s Republic of China
(China) and Hong Kong, China and Macau, the European Free Trade
Association (EFTA) and Chile, and EFTA and Singapore.11 Of course,
the mere fact that an RTA has reduced trade barriers and prohibited
resort to the antidumping law does not inevitably signal that dumping
will no longer occur, as some commentators emphasize.12
This Note will examine the vacuum created in the aforementioned
RTAs by the abolition of the use of antidumping measures. Three
varieties of RTAs that prohibit antidumping have developed. The first,
which has received significant attention in the academic community
since the 1990s,13 is the explicit use of competition law to fill the void
created by the absence of antidumping law. This method is exemplified
by the adoption of a harmonized antitrust regime between Australia
8. See, e.g., United States-Chile Free Trade Agreement art. 8.1, June 6, 2003, 42 I.L.M. 1026,
available at http://www.ustr.gov/trade-agreements/free-trade-agreements/chile-fta/final-text (per-
mitting imposition of a safeguard measure where “a good originating in the territory of the other
Party is being imported into the Party’s territory in such increased quantities, in absolute terms or
relative to domestic production, and under such conditions as to constitute a substantial cause of
serious injury, or threat thereof, to a domestic industry producing a like or directly competitive
good”).
9. See, e.g., Free Trade Area Agreement, U.S.-Isr., Apr. 22, 1985, 24 I.L.M. 653 (no provisions
governing antidumping and countervailing duties).
10. See, e.g., Free Trade Agreement art. M-01, ch. F, Can.-Chile, 36 I.L.M. 1067, 1143
[hereinafter CCFTA] (no provision governing countervailing duties but prohibiting antidumping
and allowing safeguards under certain conditions).
11. See Teh et al., supra note 5, at 73.
12. See Terence P. Stewart & Timothy C. Brightbill, Trade Law and Competition Policy in
Regional Trade Arrangements, 27 LAW & POL’Y INT’L BUS. 937, 942 (1996) (“The existence of a
‘free trade area’ (or any type of regional trade arrangement) does not imply that dumping has
disappeared . . . .”).
13. See, e.g., Rex Ahdar, The Role of Antitrust Policy in the Development of Australian-New Zealand
Free Trade, 12 NW. J. INT’L L. & BUS. 317 (1991); John Farrar, Harmonisation of Business Law Between
Australia and New Zealand, 19 VICTORIA U. WELLINGTON L. REV. 435 (1989).
214 [Vol. 44
and New Zealand.14 In the second variety, the role of competition law is
acknowledged, but the parties stop short of fully harmonizing their
differing national laws, instead agreeing to, for example, “adopt or
maintain measures to proscribe anti-competitive business conduct.”15
RTAs between Canada and Chile, EFTA and Chile, and EFTA and
Singapore have adopted this model.16 Finally, in the third variety,
typified by China’s agreements with Hong Kong and Macau, competi-
tion law is not mentioned as a replacement or alternative to antidump-
ing.17
This Note will examine these three varieties of RTAs that prohibit
antidumping. Part II will begin by reviewing the legal basis for RTAs
and the use of trade remedies and antidumping in particular within
free trade areas; it will proceed to examine the interaction between
trade and competition law. Part III will analyze the provisions of the
RTAs described above, the trading relationships between the parties,
and the use of antidumping law before and competition law after the
signing of the agreements. Finally, Part IV will seek to explain why the
parties to these RTAs are willing to prohibit antidumping and what
accounts for the nonuse of competition law in those RTAs where
competition has replaced antidumping. This Note will argue that in
certain extraordinary cases, antidumping is neither necessary nor
useful in an RTA. These cases arise where the parties have a very limited
trading relationship, simply do not use trade remedies, or have an
otherwise extraordinary relationship. The Note thus rejects alternative
theories that look to decreased opportunities for arbitrage, trade
“attrition,” or a “broader push for integration” to explain the parties’
14. See Closer Economic Relations Trade Agreement, Austl.-N.Z., Mar. 28, 1983, 22 I.L.M.
945 [hereinafter ANZCERTA]; Protocol on Acceleration of Free Trade in Goods, Austl.-N.Z.,
Aug. 18, 1988, available at http://www.dfat.gov.au/fta/anzcerta/downloads/099.pdf [hereinafter
Protocol on Acceleration of Free Trade in Goods]; Memorandum of Understanding Between the
Government of New Zealand and the Government of Australia on Harmonization of Business
Law, Austl.-N.Z., July 1, 1988, in John Farrar, Harmonisation of Business Law Between Australia and
New Zealand, 19 VICTORIA U. WELLINGTON L. REV. 435, 442-45 (1989) [hereinafter Memorandum of
Understanding on Harmonization of Business Law].
15. See CCFTA, supra note 10, at 1135.
16. See id.; ECFTA, supra note 7; European Free Trade Association-Singapore Free Trade
Agreement art. 1, June 26, 2002, available at http://www.fta.gov.sg/fta_esfta.asp?hl⫽11 [herein-
after ESFTA].
17. See Mainland and Hong Kong Closer Economic Partnership Arrangement, China-H.K.,
June 29, 2003, available at http://www.tid.gov.hk/english/cepa/files/main_e.pdf [hereinafter
CEPA-HK]; Mainland and Macau Closer Economic Partnership Arrangement, China-Mac., June 29,
2003, available at http://fta.mofcom.gov.cn/topic/enmacau.shtml [hereinafter CEPA-Macau].
2012] 215
willingness to prohibit antidumping. Finally, competition law, al-

though seldom utilized, serves an important function by serving as a
backstop against potential future dumping activity.
II. THE LAW GOVERNING REGIONAL TRADE AGREEMENTS

AND TRADE REMEDY PROVISIONS
A. Regional Trade Agreements

One of the guiding principles of the WTO system is non-discrimina-
tion or the most-favored nation principle, as enunciated in Article I of
the GATT.18 That Article provides that “any advantage, favour, privi-
lege or immunity granted by any contracting party to any product
originating in or destined for any other country shall be accorded
immediately and unconditionally to the like product originating in or
destined for the territories of all other contracting parties.”19 This
requirement that trading benefits be provided without discrimination
applies to customs duties and any other charges imposed on imports.20
Article I therefore requires that any WTO member that elects to extend
a trade benefit to another WTO member must offer the same benefit to
all other WTO members.
RTAs depart from this principle of non-discrimination.21 In an RTA,
the parties “offer to each other, by definition, more favorable treat-
ment in trade matters than to the rest of the world, including WTO
members.”22 Despite the general principle of non-discrimination, the
WTO has carved out an exception through three provisions which offer
the legal bases for RTAs23: (1) Article XXIV of the GATT,24 (2) the
so-called “Enabling Clause,”25 and (3) Article V of the General Agree-
ment on Trade in Services (GATS).26 Each rule provides a slightly
18. See GATT, supra note 2, art. I:1.

19. Id.
20. See id.
21. See Regional Trade Agreements: the WTO’s Rules, WORLD TRADE ORGANIZATION,
http://www.wto.org/english/tratop_e/region_e/regrul_e.htm (last visited Nov. 25, 2012).
22. Leal-Arcas, supra note 1, at 600.
23. See id. at 602.
24. GATT, supra note 2, art. XXIV.
25. Decision on Differential and More Favourable Treatment, Reciprocity and Fuller Partici-
pation of Developing Countries, World Trade Organization, Decision of 28 November 1979,
L/4903 (Nov. 28, 1979), available at http://www.wto.org/english/docs_e/legal_e/enabling
1979_e.htm [hereinafter Enabling Clause].
26. General Agreement on Trade in Services art. V, Apr. 15, 1994, 33 I.L.M. 1125 [herein-
after GATS].
216 [Vol. 44
different basis for an RTA.

The majority of RTAs are constituted based on the exception to the
non-discrimination principle found in GATT Article XXIV.27 In recog-
nition of the value of increasing freedom of trade through regional
agreements,28 Article XXIV(5) allows for the formation of customs
unions or free trade areas.29 Article XXIV(8) defines a free trade area
as “two or more customs territories in which the duties and other
restrictive regulations of commerce . . . are eliminated on substantially
all the trade between the constituent territories,”30 thus creating an
obligation upon RTA parties that such trade barriers be significantly
removed.31 Article XXIV, while at first glance straightforward, contains
a number of ambiguities. For instance, it has been interpreted both as a
derogation only from GATT Article I, meaning that RTA parties are
bound by all other WTO provisions, and as a derogation from all WTO
provisions and not just the non-discrimination principle.32
The Enabling Clause and GATS Article V are used much less
frequently than Article XXIV as the legal foundation for RTAs.33 The
Enabling Clause is a 1979 decision by parties to the GATT that allows
derogation from the non-discrimination principle for developing coun-
tries.34 Specifically, paragraph 2(c) of the decision provides an excep-
tion to non-discrimination for regional or global arrangements among
developing nations for the mutual reduction or elimination of tariffs
and non-tariff measures.35 Paragraph 3 requires that RTAs “shall not
constitute an impediment to the reduction or elimination of tariffs and
other restrictions to trade on a most-favoured-nation basis.”36 GATS
Article V, the least used of the three exceptions, provides a means for
countries to enter agreements liberalizing trade in services, provided
27. See Prusa, supra note 6, at 184 (according to the author’s compilation, 82.4% of RTAs
studied fell under GATT article XXIV).
28. See GATT, supra note 2, art. XXIV:4.
30. Id. art. XXIV:7.
31. See MARCEAU, supra note 5, at 187 (“Article XXIV(8)(b) requires that duties and other
restrictive regulations of commerce be eliminated on substantially all the trade within a free-trade
area.”).
32. See Leal-Arcas, supra note 1, at 605-06. Additional ambiguities, which are beyond the
scope of this Note, concern the interaction of Article XXIV(8) and GATT Article XIX as well as
whether Article XXIV(4) represents a general principle or an affirmative obligation. See id. at 606.
33. See Prusa, supra note 6, at 184.
34. See Enabling Clause, supra note 25.
35. See id. ¶ 2(c).
36. See id. ¶ 3(b).
2012] 217
that such agreements have “substantial sectoral coverage” and elimi-

nate “substantially all discrimination” among the parties.37
B. Trade Remedy Provisions in RTAs

As noted in the Introduction, the existence and use of trade rem-
edies within free trade areas seems counterintuitive. Antidumping,
which is authorized by GATT Article VI, is the use of a duty by one party
against certain imports from another party to offset or prevent dump-
ing, that is, the importation of such goods at less than “normal value,”38
which is the appropriate price in the market of the exporting country.
Dumping is prohibited only if it causes or threatens “material injury” to
an established industry in the importing country or if it hinders the
establishment of an industry.39 Countervailing duties, also authorized
by GATT Article VI, are “special dut[ies] levied for the purpose of
offsetting any bounty or subsidy bestowed directly, or indirectly, upon
the manufacture, production or export of any merchandise.”40 Finally,
GATT Article XIX permits safeguard action, which is the temporary
restriction of certain imports to protect a domestic industry from a
sudden increase in those imports that causes or threatens “serious
injury” to the domestic industry.41
Thus, antidumping, countervailing duties, and safeguards all repre-
sent codified exceptions to GATT Article I’s injunction against parties
conferring benefits to some trade partners and not others.42 Further, as
barriers to trade liberalization, trade remedies cut against an essential
condition of RTAs, which is the elimination of “duties and other
restrictive regulations of commerce” on “substantially all the trade”
within the resulting free trade area.43 Nevertheless, contingent protec-
tion is permitted, or at least not explicitly prohibited, under WTO law.
Some have argued that the language in GATT Article XXIV requiring
parties within free trade areas to “eliminate duties and other regula-
tions restricting trade” implicitly encompasses trade remedies and thus
acts as a prohibition on their use in RTAs.44 However, neither GATT
37. See GATS, supra note 26, art. V:1.

38. See GATT, supra note 2, art. VI.
39. See id.
40. See id. art. VI:3.
41. See id. art. XIX.
42. See id. art. I.
44. See MARCEAU, supra note 5, at 187-88. Marceau argues that because most, if not all,
antidumping measures restrict trade, maintaining antidumping duties within an FTA violates the
218 [Vol. 44
Article XXIV, nor the Enabling Clause, nor GATS Article V contains a
clear legal prohibition on contingent protection measures in RTAs.45
Indeed, in practice, trade remedies overwhelmingly persist.
A number of commentators have attempted to explain the presence
of trade remedies within RTAs.46 One theory, which applies not only to
RTAs but to trade more generally, is based on the “political economy of
protection” and states that because those who are likely to lose from
free trade, namely import-competing industries, are not compensated
by those who gain from free trade, they have an “incentive to strive for
protection through the political process of trade policy making.”47
Similarly, trade remedies might be seen as a “pressure-release valve,”
managing the political consequences imposed by the costs of freer
trade and thus enabling continued liberalization.48
C. Trade Remedy Configurations in RTAs

Whatever the reasons, trade remedies do exist within RTAs in a
dizzying number of configurations.49 Parties contemplating joining an
RTA have essentially three options with respect to a given trade
remedy: completely prohibit use of the remedy, establish specific rules
governing its use, or decline to address the remedy at all. Furthermore,
the parties may treat antidumping, countervailing duties, and safe-
guards in different manners. These two factors lead to a plethora of
configurations, further compounded by the diversity of RTAs in terms
guidelines of the GATT “to eliminate duties and other regulations restricting trade.” See id. at 187.
Further, the “discipline” of antidumping duties becomes unnecessary when the tariffs they are
supposed to protect have disappeared as occurs in a free trade area. Id. at 187. Marceau also notes
that in many FTAs, member states have expressly retained the ability to impose antidumping
duties; member states would not feel the need to retain such a right if it were clear that
antidumping duties were outside the scope of “regulations restricting trade.” See id. at 188.
45. See GATT, supra note 2, art. XXIV; Enabling Clause, supra note 25; GATS, supra note 26,
art. V.
46. See Prusa, supra note 6, at 180 (giving a good overview of the academic discussion
concerning the existence of contingent protection in RTAs).
47. See P. K. M. Tharakan, Political Economy and Contingent Protection, 105 ECON. J. 1550, 1551,
1552 (1995).
48. See Prusa, supra note 6, at 180 (citing JOHN H. JACKSON, THE WORLD TRADING SYSTEM: LAW
AND POLICY OF INTERNATIONAL ECONOMIC RELATIONS (1997)).
49. This Note will utilize Thomas Prusa’s excellent comprehensive study of contingent
protection rules in RTAs, previously referenced on several occasions, which is found in PREFEREN-
TIAL TRADE AGREEMENT POLICIES FOR DEVELOPMENT: A HANDBOOK, supra note 6, at 184. Prusa,
Robert Teh, and Michele Budetta undertook a similar study in a WTO working paper. See Teh
et al., supra note 5.
2012] 219
of the size of intraregional trade, level of integration between the

parties, development status of the parties, and the legal basis of the
agreement.50
To demonstrate the array of possible configurations, consider some
of the RTAs Australia has entered. The Closer Economic Relations
Trade Agreement between Australia and New Zealand and its successor
agreements prohibit antidumping, regulate countervailing duties, and
allow the use of global safeguards with some restrictions.51 The Thailand-
Australia Free Trade Agreement allows all three remedies, but under
certain conditions.52 And the Australia-United States Free Trade Agree-
ment freely allows the use of antidumping and countervailing duties,
but sets rules on the use of safeguards.53 Thus, countries do not always
demonstrate consistency throughout their various RTAs.
Most commonly, the parties to an RTA will either retain full use of a
trade remedy or establish rules governing such use. On the other hand,
flat-out prohibitions of trade remedies are significantly rarer and thus
merit further consideration. In a WTO working paper,54 Thomas
Prusa, Robert Teh, and Michele Budetta surveyed seventy-four RTAs
that were selected based on geographical diversity, economic signifi-
cance, and recentness.55 The authors found that only thirteen of the
seventy-four RTAs under consideration had entirely prohibited at least
one trade remedy.56 Of these thirteen, only the European Community
(now the European Union) has disallowed the use of antidumping,
countervailing duties, and safeguards.57 Because of the unique nature
of European integration, this Note will not address the intra-European
RTAs—the European Community, European Economic Area, and
European Free Trade Association— each of which has prohibited
antidumping.58
50. See Prusa, supra note 6, at 184.

51. See Protocol on Acceleration of Free Trade in Goods, supra note 14, art. 4; ANZCERTA,
supra note 14, arts. 16, 17.
52. See Thailand-Australia Free Trade Agreement ch. 5, arts. 206, 207, Thai.-Austl., July 5,
2004, available at http://www.dfat.gov.au/fta/tafta/tafta_toc.html.
53. See United States-Australia Free Trade Agreement ch. 9, art. 1.2(4)(b), May 18, 2004, 43
I.L.M. 1248.
54. See Teh et al., supra note 5.
55. See id. at 7.
56. See id. at 73.
57. See id.
58. Geographic proximity, longstanding trade relationships, centralized governing authori-
ties, similar economies, the creation of a customs union, and other factors distinguish European
economic integration from that occurring under the RTAs that this Note will consider.
220 [Vol. 44
The six remaining RTAs in which antidumping is completely pro-

hibited—the Closer Economic Relations Agreement between Aus-
tralia and New Zealand, Canada-Chile Free Trade Agreement, EFTA-
Singapore Free Trade Agreement, EFTA-Chile Free Trade Agreement,
Mainland and Hong Kong Closer Economic Partnership Arrangement,
and Mainland and Macau Closer Economic Partnership Arrangement—
are the subject of this Note.59 However, before examining these RTAs,
it is necessary to explore the relationship between antidumping and
competition law.
D. Antidumping and Antitrust: Common Enemies, Divergent Methods

Competition policy seeks to achieve efficient resource allocation60
and to promote and maintain healthy inter-firm rivalry in markets.61
This is achieved primarily through the application of competition law
and pro-competitive regulation to address anti-competitive market
structures and business practices.62 Competition and trade policy share
significant overlap in that both disciplines essentially seek to promote
economic efficiency and consumer welfare, and thus, economic devel-
opment more broadly.63 Similarly, both competition and trade policy
can contribute to “ensuring the effective equality of competitive oppor-
tunities” in world markets.64
More specifically, antidumping and competition law are generally
consistent in their objectives.65 Antidumping law provides a remedy for
situations in which goods are imported at less than normal value.66
Competition law similarly provides a remedy for instances where the
same goods are supplied domestically at varying prices.67 Thus, both
59. To the author’s knowledge, no study of these RTAs has been undertaken in recent years,
despite the unique prohibition of antidumping present in each and despite the rich debate over
the possibility of replacing antidumping with competition law in RTAs, a debate which began in
the 1990s and continued into the early 2000s.
60. See Bernard Hoekman & Petros Mavroidis, Dumping, Antidumping, and Antitrust, 30 J. WORLD
TRADE 27, 28 (1996).
61. See Working Group on the Interaction Between Trade and Competition Policy, The
Fundamental Principles of Competition Policy, 5, WT/WGTCP/W/127 (1999).
62. See id.
63. See id. at 3.
64. See id.
65. See Timothy C. Brightbill & Charles O. Verrill, International Trade Law and Regulation
Cases and Materials 139 (2011) (unpublished manuscript) (on file with Georgetown University
Law Center).
66. See id.
67. See id. at 140.
2012] 221
antidumping and competition law take aim at the problem of discrimi-

natory pricing.68 In the United States, for example, this parallelism is
found between the Antidumping Act69 and the Robinson-Patman
Act.70 The Antidumping Act allows for the imposition of a duty where
foreign merchandise is being or is likely to be sold in the United States
at less than “fair value” (the price in the country of production or
third-country markets) and a domestic industry subsequently faces
harm.71 Analogously, the Robinson-Patman Act creates potential liabil-
ity for a U.S. supplier that discriminates in price between “different
purchasers of commodities of like grade and quality.”72 Of course,
under U.S. law and as a theoretical matter, there are clear differences
between antidumping and competition law, in terms of, for example,
calculation of pricing and the scope of injury required for relief.73
However, the important point for the purposes of this Note is that
antidumping and competition law serve an identical purpose in some
respects—to prevent discriminatory pricing— but do so in different
contexts and through different methods. Antidumping law is typically
used transnationally, while competition law applies in domestic con-
texts.
In light of the similar purposes of antidumping and competition law,
the long-recognized possibility of collaboration between the two disci-
plines74 came into focus in the 1990s as a result of European unifica-
tion and the North American Free Trade Agreement (NAFTA) negotia-
tions.75 At the start of the 1990s, Europe consisted of two main free
trade areas, the European Community (EC) and EFTA.76 The establish-
ment of the European Economic Area (EEA) in 1994 effectively
merged the two into what would later become the European Union
68. See id.

69. 19 U.S.C. § 1673 (2006).
70. 15 U.S.C. § 13 (2006); see also Brightbill & Verrill, supra note 65, at 140.
71. See 19 U.S.C. § 1673 (2006); 19 U.S.C. § 1673b (2006).
72. See 15 U.S.C. § 13 (2006).
73. See Brightbill & Verrill, supra note 65, at 141-44. For example, for the purposes of
antidumping, a price is predatory if it is below the sum of all costs as well as profit to the producer.
See id. On the other hand, in the antitrust context, most courts have held that a predatory price is
one that is below average variable costs, that is, “the total costs of materials, labor, and energy
required to produce an additional unit of output from existing equipment and facilities.” See id.
74. See Eleanor M. Fox, Competition Law and the Agenda for the WTO: Forging the Links of
Competition and Trade, 4 PAC. RIM L. & POL’Y J. 1, 31 (1995).
75. NAFTA, supra note 4.
76. Whereas the EC was the predecessor of the European Union, EFTA consisted of Austria,
Denmark, Norway, Portugal, Sweden, Switzerland, and the United Kingdom.
222 [Vol. 44
(EU).77 Article 26 of the agreement that created the EEA essentially

abolished antidumping between EC and EFTA states.78 At the same
time, Articles 53 to 60 of the same agreement created common
competition rules applicable to both trade blocs.79 Thus, the combina-
tion of the two large trading blocs in Europe was accompanied by the
abolition of antidumping and harmonization of competition policy.
Across the Atlantic, Canada and Mexico bargained with the United
States for a similar arrangement but were unable to obtain it. In early
discussions, Canadian negotiators’ “opening position was to replace
antidumping rules with competition law, an approach they bolstered
with the question, ‘Why do we have to have these rules in a free trade
area?’”80 However, the U.S. insistence on retention of antidumping
and other trade remedies led to the compromise embodied in NAFTA
Chapter 19, which created a bi-national panel charged with reviewing
domestic antidumping and countervailing duty determinations.81 With
respect to competition policy, Chapter 15 requires the parties to
“proscribe anti-competitive business conduct, take appropriate action
concerning such conduct, and notify interested parties of monopoly
designations.”82 Further, Chapter 15 establishes a Working Group on
Trade and Competition.83 Thus, while NAFTA negotiators were unable
to achieve the comprehensiveness of the EEA arrangement, the interac-
tion of trade and competition was very much a key issue.
III. REGIONAL TRADE AGREEMENTS IN WHICH ANTIDUMPING IS PROHIBITED

This Section will examine in chronological order the Australia-New
Zealand Closer Economic Relations Trade Agreement, Canada-Chile
Free Trade Agreement, EFTA-Singapore Free Trade Agreement, EFTA-
Chile Free Trade Agreement, Mainland and Hong Kong Closer Eco-
nomic Relations Arrangement, and Mainland and Macau Closer Eco-
nomic Relations Arrangement. In particular, this Section will address
77. See European Economic Area (EEA), EUROPEAN UNION, http://eeas.europa.eu/eea/ (last
visited Nov. 25, 2012).
78. See Agreement on the European Economic Area art. 26, May 2, 1992, 1994 O.J. (L 1) 3.1
(EC) [hereinafter EEA Agreement]. Article 26 was limited so that antidumping was permitted
with respect to the fisheries industry. See Protocol 13 on the Non-Application of Antidumping and
Countervailing Measures, May 2, 1992, 1994 O.J. (L 1) 606 (EC).
79. See EEA Agreement, supra note 78, arts. 53-60.
80. See MAXWELL CAMERON & BRIAN TOMLIN, THE MAKING OF NAFTA 88 (2000).
81. See NAFTA, supra note 4, ch. 19.
82. See id. ch. 15.
83. See id.
2012] 223
the agreements’ provisions regarding antidumping and competition

law, the level of economic integration before and after the agree-
ments,84 use of antidumping law before the agreements, use of compe-
tition law after the agreements (where relevant), and any other perti-
nent considerations.
A. Australia-New Zealand Closer Economic Relations

Trade Agreement (1983)
Building upon decades of efforts to increase integration,85 the
Australia-New Zealand Closer Economic Relations Trade Agreement
(ANZCERTA) came into force on January 1, 1983.86 The objectives of
ANZCERTA included the elimination of “barriers to trade between
Australia and New Zealand in a gradual and progressive manner” and
the development of trade “under conditions of fair competition.”87
Five years later, before a mandatory review called for by the agreement,
trade between Australia and New Zealand had doubled.88
The Protocol on Acceleration of Free Trade in Goods that resulted
from the review entered into force on August 18, 1988.89 In addition to
requiring the parties to completely eliminate tariffs by 1990, the
Protocol is notable for its prohibition of antidumping and simultane-
ous obligation to apply domestic competition law to conduct normally
addressed by antidumping law.90 The original 1983 agreement had
neither directly addressed competition law nor fully prohibited anti-
dumping (although it had bound the parties to consult prior to the
imposition of antidumping duties).91 The Protocol, then, addressed
these issues by recognizing that “the markets of the Member States are
progressively achieving a higher level of integration and acquiring
many of the characteristics of a single unified market.”92
84. For the purposes of this Note, level of economic integration will generally be considered
on the basis of percentage of imports and exports in bilateral trade. This is admittedly a blunt
approximation of economic integration. Unless the percentages have been explicitly provided,
most of the figures have been calculated using statistics from each state’s government.
85. See Ahdar, supra note 13, at 318.
86. See ANZCERTA, supra note 14.
87. See id. art. 1.
88. See Ahdar, supra note 13, at 319 (citing J. Waincymer, International Trade and Investment,
18 AUSTL. BUS. L. REV. 267 (1990)).
89. See Protocol on Acceleration of Free Trade in Goods, supra note 14.
90. See id. arts. 1, 4.
91. See ANZCERTA, supra note 14, art. 15.
92. See Protocol on Acceleration of Free Trade in Goods, supra note 14, pmbl.
224 [Vol. 44
However, modification of domestic antitrust law had begun prior to

the Protocol. Antitrust in Australia and New Zealand differed signifi-
cantly: Australia’s system was very pro-competition and similar to that of
the United States, whereas New Zealand’s was oriented towards “public
interest” goals and modeled after the United Kingdom’s system.93 The
first step towards harmonization of the two divergent models was New
Zealand’s 1986 Commerce Act,94 which largely adopted the antitrust
provisions of the Australian Trade Practices Act of 1974.95 The next
steps, undertaken after the Protocol in the belief that “domestic
antitrust could address problems of trans-Tasman predation,” were the
New Zealand Commerce Amendment Act of 199096 and Australian
Trade Practices Act of 1990,97 which came into force alongside the
prohibition of antidumping duties.98 The enactments extended each
country’s respective antitrust laws to apply extraterritorially between
the two.99 Thus, an Australian firm possessing a dominant position in
either Australia or New Zealand would henceforth be subject to the
antitrust laws of New Zealand, and vice versa. Furthermore, both acts
included ancillary measures related to evidence, procedure, and enforce-
ment of judgments.100
The antitrust-based test for liability under the Trade Practices Act
and Commerce Act, although aimed at dumping, seems far-removed
from the methods and standards of antidumping law. Section 36 of the
Commerce Act applies when three elements are established: (1) a
person or business has a substantial degree of power in a market;
(2) that person or business takes advantage of that power; and (3) the
purpose of the behavior is to restrict the entry of any person or business
into that or any other market, prevent or deter a person or business
from engaging in competitive behavior in that or any other market, or
93. See Ahdar, supra note 13, at 321-22.

94. Commerce Act 1986, S.N.Z. No. 5 § 36 (N.Z.), available at http://www.legislation.govt.nz/
act/public/1986/0005/16.0/DLM88281.html#DLM88281.
95. Trade Practices Act 1974 (Cth) (Austl.), available at http://www.australiancompetitionlaw.
org/legislation.html; see also Ahdar, supra note 13, at 322.
96. Commerce Amendment Act 1990, S.N.Z. No. 41 (N.Z.), available at http://www.legislation.
govt.nz/act/public/1990/0041/latest/DLM210449.html.
97. Trade Practices (Misuse of Trans-Tasman Market Power) Act 1990 (Cth) no. 70 (Austl.),
available at http://www.australiancompetitionlaw.org/legislation.html.
98. See Ahdar, supra note 13, at 322-23. The Trade Practices Act has been renamed the
Competition and Consumer Act as of January 1, 2010.
99. See Trade Practices Act 1990, supra note 97, § 46(A)(8).
100. See id. § 46(A)(7).
2012] 225
eliminate any person or business from that or any other market.101

Consider an Australian manufacturer dumping goods in a market in
New Zealand. A petitioner seeking relief under the Commerce Act
must demonstrate that the manufacturer has a substantial degree of
power in the market and has acted purposefully to deter or eliminate its
competition. These are difficult hurdles to surpass, especially com-
pared to the antidumping law, which does not require a showing of
either market power or intent.102
Economic integration between Australia and New Zealand was sub-
stantial prior to the liberalization of trade allowed by ANZCERTA. In
1983, when the agreement was inked, 5.02% of Australia’s exports were
destined for New Zealand, and 3.2% of its imports came from New
Zealand.103 In the same year, New Zealand sent twelve percent of its
exports to its northwestern neighbor.104 Economic integration, strong
even before the establishment of ANZCERTA, continued to deepen,
especially from New Zealand’s perspective. Indeed, more than a de-
cade after the signing of ANZCERTA, Australia had become New
Zealand’s most significant trading partner, according to the New
Zealand government.105 For example, in 2010, twenty-three percent of
New Zealand’s exports were destined for Australia and 18.2% of its
imports came from Australia.106 In the same year, 3.5% of Australia’s
exports were destined for New Zealand and 3.4% of its imports came
from New Zealand.107
101. See Commerce Act 1986, supra note 94; ANTI-COMPETITIVE PRACTICES UNDER PART II OF
THE COMMERCE ACT, NEW ZEALAND COMMERCE COMMISSION (2002), available at http://www.
comcom.govt.nz/competition-downloads. Note that section 36 is substantially similar to section
46 of Australia’s Trade Practices Act.
102. See Ahdar, supra note 13, at 327 (“[T]he defendant in monopolization proceedings must
possess substantial market power (Australia) or a dominant market position (New Zealand). This
is not a prerequisite for anti-dumping law . . . [A]nti-dumping concentrates on the effects of the
defendant’s conduct . . . By contrast, sections 36A and 46A are drafted in terms of purpose.”).
103. See AUSTRALIAN BUREAU OF STATISTICS, YEAR BOOK AUSTRALIA 611-12 (1984), available at
http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/1301.01984.
104. See New Zealand Exports 1910-2010, NEW ZEALAND TRADE AND ENTERPRISE, http://
www.nzte.govt.nz/features-commentary/features/our-economy/pages/new-zealand-exports-1910 –
2010.aspx (last visited Nov. 25, 2012).
105. See Jason Attewell, Australia is New Zealand’s most significant trading partner, STATISTICS
NEW ZEALAND (Nov. 2002), http://www.stats.govt.nz/browse_for_stats/industry_sectors/imports_
and_exports/australia-is-nzs-most-significant-trading-partner.aspx.
106. Exports and Imports Tables, STATISTICS NEW ZEALAND, http://www.stats.govt.nz/tools_and
_services/tools/TableBuilder/exports-and-imports-tables.aspx (last visited Nov. 25, 2012).
107. See AUSTRALIAN GOV’T, DEP’T OF FOREIGN AFFAIRS & TRADE, COMPOSITION OF TRADE
AUSTRALIA 65 (2010), available at http://www.dfat.gov.au/publications/stats-pubs/cot-cy-2010.pdf.
226 [Vol. 44
Australia and New Zealand’s use of antidumping remedies was

steadily diminishing in the run-up to the prohibition of antidumping
under ANZCERTA. In New Zealand, between 1983 and 1988, thirty-
nine antidumping complaints were filed against Australian firms, of
which only two resulted in a finding of dumping.108 Likewise, in
Australia, from 1982 to 1988, thirty-four cases were filed against firms
from New Zealand, and only three resulted in affirmative findings of
dumping.109
Resort to competition law to fill the void created by ANZCERTA’s
prohibition of antidumping has not materialized in practice. In its 2011
review of Australia’s trade policies, the WTO found that Australian
competition legislation has never been exercised with regards to im-
ports from New Zealand.110 Similarly, according to the Public Register
on Anti-competitive Practices Authorisations maintained by the New
Zealand Commerce Commission, which is tasked with enforcing the
relevant Commerce Amendment Act provisions, no actions have been
taken against Australian firms.111 The situation therefore appears quite
similar to that which existed pre-Protocol, when the “antidumping laws
themselves were not proscribing much dumping.”112 As Ahdar has
stated, “[t]he anti-dumping laws had become largely redundant even
before full free trade materialized. Their abolition and replacement
with a weaker form of control (antitrust) thus represents little
change.”113
B. Canada-Chile Free Trade Agreement (1997)

The Canada-Chile Free Trade Agreement (CCFTA) entered into
Although the percentage of Australia’s exports bound for New Zealand decreased substantially,
the total volume of trade has increased substantially.
109. See id. at 329 n.62.
110. See WTO Secretariat, Trade Policy Review: Australia, 45-46, WT/TPR/S/244 (Mar. 1,
2011).
111. See Anti-competitive Practices Authorisations Register, NEW ZEALAND COMMERCE COMMIS-
SION, http://www.comcom.govt.nz/anti-competitive-practices-authorisations-register (last visited
Nov. 25, 2012). An archived internet version of the Register was also consulted to verify that no
actions have been undertaken. Anti-competitive Practices Authorisations Register (January 10, 2010
version), NEW ZEALAND COMMERCE COMMISSION, http://web.archive.org/web/20100110221620/
http://www.comcom.govt.nz/PublicRegisters/restrictivetradepractices.aspx (last visited Nov. 25,
2012).
113. See id.
2012] 227
force on July 5, 1997.114 The CCFTA was the first free trade agreement
for Chile and the first between Canada and a South American coun-
try.115 At the time, the CCFTA was contemplated as an interim agree-
ment that would facilitate Chile’s eventual accession to NAFTA; thus,
much of the CCFTA resembles NAFTA and the agreement has been
described as a “NAFTA equivalent.”116
The CCFTA’s objectives are, among other things, to eliminate trade
barriers and “promote conditions of fair competition in the free trade
area.”117 Article M-01 requires the parties to abstain from applying
their domestic antidumping laws against each other and to amend as
needed such laws in relation to goods of the other party.118 Article M-04
allows for consultation regarding antidumping in “exceptional circum-
stances,”119 and Article M-05 creates a Committee on Antidumping and
Countervailing Measures with annual meetings.120
The CCFTA does not explicitly link the prohibition of antidumping
with the use of competition law. The agreement’s competition pro-
visions mirror those of NAFTA.121 Article J-01 requires the parties
to “proscribe anti-competitive business conduct and take appro-
priate action with respect thereto, recognizing that such measures will
enhance the fulfillment of the objectives of this Agreement.”122
Article J-01 also stresses the importance of “cooperation and coordina-
tion” among the parties’ competition authorities “to further effective
competition law enforcement in the free trade area.”123 Ostensibly, any
competition enforcement actions would be subject to the notification
provisions of Chapter L.124 Specifically, under Article L-03, each party
must notify the other of “any proposed or actual measure that the Party
considers might materially affect the operation of this Agreement or
114. See CCFTA, supra note 10.

115. See Emma Lavoie-Evans, Canada’s Free Trade Agreements with Latin America 5 (Dialogue on
Canada-Latin American Economic Relations, Background Paper, 2010).
116. See CCFTA, supra note 10.
117. See id. art. A-02.
118. See id. art. M-01.
119. See id. art. M-04.
120. See id. art. M-05.
121. See Patricia Smith, Deputy Dir. of Investigation and Research, Competition Bureau of
Can., Address to 4th Annual Canadian Importers Association Conference (Sept. 25, 1997),
available at http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/00930.html.
122. See CCFTA, supra note 10, art. J-01.
123. See id.
124. See id. ch. L.
228 [Vol. 44
otherwise substantially affect the other Party’s interests.”125

Four years after the signing of the CCFTA, Canada and Chile signed
the Memorandum of Understanding Between the Commissioner of
Competition (Canada) and the Fiscal Nacional Economico (Chile)
Regarding the Application of their Competition Laws.126 The effect
of the Memorandum was to explicitly adapt the notification process
to the competition policy setting.127 Additional provisions call for
meetings between the Canadian and Chilean competition authorities
and confidentiality of information, among other things.128 Although
the Memorandum stresses the “importance of cooperation and coordi-
nation among competition authorities to further effective competition
law enforcement in the free trade area,” antidumping is not men-
tioned.129
The level of integration between Canada and Chile around the time
of the CCFTA’s creation was limited.130 During the second half of the
1990s, bilateral trade flows represented 1.5% of Canada’s total trade
volume and 0.1% of Chile’s.131 As of 2008, trade with Canada repre-
sented two percent of Chile’s total international trade.132 In 2010,
domestic exports from Canada to Chile amounted to a paltry 0.14%
of the former’s total exports, and imports from Chile to Canada made
up 0.46% of Canada’s total imports.133 However, in real terms, the FTA
has encouraged trade between the two countries. According to the
Canadian Ministry of Foreign Affairs, since the FTA’s launch in 1997,
bilateral merchandise trade has more than tripled to over CAD$2.7
125. See id. art. L-03.

126. Memorandum of Understanding Between the Commissioner of Competition (Canada)
and the Fiscal Nacional Economico (Chile) Regarding the Application of their Competition Laws,
Can.-Chile, Dec. 17, 2001, available at http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/
eng/01599.html [hereinafter Canada-Chile MOU].
127. See id. ¶ II.
128. See id. ¶¶ III-VII.
129. Id. pmbl.
130. See José de Araujo Jr., Antidumping in the Americas, 35 J. WORLD TRADE 555, 570 (2001).
131. Id.
132. See Chilean Total Trade, NATIONAL CUSTOMS SERVICE, GOBIERNO DE CHILE, http://www.
aduana.cl/prontus_aduana_eng/site/artic/20070929/pags/20070929112354.html (last visited
Nov. 25, 2012) (follow link for “January Total Trade”).
133. See Canadian International Merchandise Trade Database, STATISTICS CANADA, http://
cansim2.statcan.gc.ca/cgi-win/CNSMCGI.PGM?Lang⫽E&CIMT_Action⫽Sections&Result
Template⫽CII_CIMT5 (last visited Nov. 25, 2012) (query the database for World, Canada, 2010,
January, Annual, and Actual Data; also query the database for Chile, Canada, 2010, January,
Annual, and Actual Data).
2012] 229
billion in 2011.134 Chilean exports to Canada have especially benefited,

increasing from CAD$326 million in 1997 to CAD$1.7 billion in
2009.135
Antidumping measures between Canada and Chile prior to the FTA
were rare. Canada, which has long utilized antidumping law against
importers, brought only one antidumping action against Chile in 1985
from that year until the abolition of antidumping under the CCFTA.136
Chile’s antidumping laws were put in place in 1994.137 From then until
the entry into force of the CCFTA’s antidumping prohibition, during
which time the Chilean National Commission Entrusted with Investigat-
ing the Existence of Price Distortions in Imported Goods initiated
fifteen antidumping actions,138 Chile did not institute any antidump-
ing actions against Canada.139
The notification provisions of the CCFTA and subsequent Memoran-
dum of Understanding have in no way replaced the role of antidump-
ing law. Thus far, there do not appear to have been any consultations
between the respective competition authorities of Canada and Chile
regarding competition actions under the notification procedure pro-
vided by the Memorandum.
C. Agreements of the European Free Trade Association

EFTA is an intergovernmental organization founded in 1960 by the
Stockholm Convention as an “economic counterbalance to the more
politically driven European Economic Community (EEC).”140 EFTA’s
membership originally consisted of seven European countries; today,
134. See Canada-Chile Free Trade Agreement, FOREIGN AFFAIRS AND INTERNATIONAL TRADE
CANADA, http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/chile-
chili/index.aspx?view⫽d (last visited Nov. 25, 2012).
135. See Lavoie-Evans, supra note 115, at 6.
136. See Chad P. Bown, Global Antidumping Database, THE WORLD BANK, http://econ.world
bank.org/ttbd/gad (2010) [hereinafter GAD]. That one case concerned Chilean imports of
pentaerythritol, and in 1986 the Canadian International Trade Tribunal found no injury despite a
dumping margin of 40.99. See Historical Listing, CANADA BORDER SERVICES AGENCY, http://
www.cbsa.gc.ca/sima-lmsi/hist-eng.html (last visited Nov. 25, 2012).
137. See GAD, supra note 136.
138. See id.
139. See id.
140. The European Free Trade Association, EUROPEAN FREE TRADE ASSOCIATION, http://
www.efta.int/about-efta/the-european-free-trade-association.aspx (last visited Nov. 25, 2012).
230 [Vol. 44
its members are Iceland, Norway, Liechtenstein, and Switzerland.141

Liechtenstein and Switzerland form a customs union with unified trade
policies.142 The EFTA Convention governs internal trade relations
between member states, and the European Economic Area Agreement
regulates EFTA’s trade with the European Union.143 The EFTA states
have signed numerous free trade agreements with other trading part-
ners worldwide.144
1. EFTA-Singapore Free Trade Agreement (2003)

The EFTA-Singapore Free Trade Agreement (ESFTA) was signed on
June 26, 2002 and entered into force on January 1, 2003.145 The stated
objectives of the ESFTA are “liberalisation of trade in goods, in confor-
mity with Article XXIV of the General Agreement on Tariffs and
Trade” and the promotion of competition, “particularly as it relates to
economic relations between the parties.”146 Article 16 of the ESFTA
prohibits the use of antidumping measures between the parties and
explicitly ties the abolition of antidumping to competition measures by
providing that, “[i]n order to prevent dumping, the Parties shall
undertake the necessary measures as provided for under Chapter V,”
which deals with competition.147 Article 50, the only article in Chapter
V, creates a mechanism for consultation between the parties in order to
eliminate “anti-competitive agreements,” “concerted practices,” and
“abuse of dominant position.”148 The ESFTA thus explicitly contem-
plates the use of competition policy to address issues otherwise re-
served for antidumping.
Economic integration between the EFTA states and Singapore was
modest prior to the signing of the FTA and has remained so afterwards.
For example, in 2001, the EFTA states exported USD$1.24 million in
141. Id. Iceland submitted an application to join the EU in 2009. See Timeline of Events,
Iceland’s application for membership of the EU, http://eu.mfa.is/negotiations/timeline/ (last
visited Nov. 25, 2012).
142. See WTO Secretariat, Trade Policy Review: Switzerland and Liechtenstein, xv-xviii, WT/TPR/
S/208 (Nov 10, 2008).
143. See EUROPEAN FREE TRADE ASSOCIATION, supra note 140.
144. See id.
145. Overview of ESFTA, INTERNATIONAL ENTERPRISE SINGAPORE, http://www.fta.gov.sg/
fta_esfta.asp?hl⫽11 (last visited Nov. 25, 2012).
146. See ESFTA, supra note 16, art. 1.
147. See id. art. 16.
148. See id. art. 50.
2012] 231
goods to Singapore and imported USD$312 million in goods.149 By

2010, those figures had increased to USD$4.01 billion in exports and
USD$1.27 billion in imports.150 Although trade between EFTA and
Singapore has, thus, drastically increased in real terms since the
agreement entered into force, imports and exports between EFTA and
Singapore have not exceeded one percent of the former’s total interna-
tional trade flows in recent years.151
The low level of economic integration between EFTA and Singapore
was accompanied by abstinence from antidumping measures between
the parties prior to the ESFTA. Singapore, which is generally an
infrequent user of antidumping law,152 appears not to have taken any
action against EFTA states prior to the abolition of antidumping under
the FTA.153 However, the low level of economic integration does not
explain the abstinence of the EFTA states, none of which has ever
applied antidumping measures.154 According to one of the associa-
tion’s officials, “such measures are arguably not in line with the aims of
a Free Trade Agreement and the objectives of Article XXIV GATT, i.e.,
the opening of markets through the elimination of trade barriers.”155
In light of the parties’ forbearance from the antidumping laws, it is
hardly surprising that competition has replaced antidumping in name
only and that no consultations between EFTA and Singapore under the
Article 50 mechanism designed to target dumping by way of competi-
tion law have taken place so far.156
2. EFTA-Chile Free Trade Agreement (2004)

The EFTA-Chile Free Trade Agreement (ECFTA) was signed on
June 26, 2003 and entered into force on December 1, 2004.157 The
149. See Free Trade Agreement Between the EFTA States and Singapore, EUROPEAN FREE
TRADE ASSOCIATION, Ref. 24945 (2002), http://www.efta.int//media/Documents/legal-texts/free-
trade-relations/singapore/EFTA-Singapore%20Introduction.pdf (last visited Nov. 25, 2012).
150. See EFTA States’ Trade with Singapore, 2001–2011, EUROPEAN FREE TRADE ASSOCIATION,
http://www.efta.int//media/Documents/free-trade/trade-statistics/Singapore.pdf (last visited
Nov. 25, 2012).
151. See id.
152. See WTO Secretariat, Trade Policy Review: Singapore, 34, WT/TPR/S/202 (June 9, 2008)
(“Singapore makes very limited use of contingency measures.”).
154. See Information from EFTA Secretariat (Dec. 19, 2011, 04:00 EST).
155. Id.
156. See id.
157. See Free Trade Agreements: Chile, EUROPEAN FREE TRADE ASSOCIATION, http://
www.efta.int/free-trade/free-trade-agreements/chile.aspx (last visited Nov. 25, 2012).
232 [Vol. 44
stated objectives include the achievement of “progressive and recipro-

cal liberalisation of trade in goods” and the promotion of “conditions
of fair competition in the free trade area.”158 Article 18 of the agree-
ment prohibits the use of antidumping measures between the parties
and recognizes that “the effective implementation of competition rules
may address economic causes leading to dumping.”159 Competition
measures are elaborated in Chapter VI.160 Specifically, Article 73
provides for a notification system,161 Article 74 suggests but does not
require coordination of enforcement activities,162 Article 75 establishes
a consultation mechanism,163 and Article 76 encourages the exchange
of information between the parties.164
The level of economic integration between the EFTA states and
Chile was minuscule prior to the signing of the FTA and has remained
so even after. In 2003, only 0.6% of Chile’s total exports were bound for
an EFTA state and just 0.8% of its imports came from an EFTA state.165
In 2008, those figures had decreased to 0.5% and 0.6%, respectively.166
From EFTA’s perspective, the trading relationship is even more incon-
sequential. For instance, in recent years, imports and exports between
EFTA and Chile have never exceeded 0.1% of the former’s total
international trade flows.167
Probably due to the insubstantial amount of trade between EFTA
and Chile, antidumping and competition actions have not been neces-
sary between the parties. Chile, a moderate user of antidumping
remedies, has not undertaken any antidumping actions against EFTA
states.168 As discussed above, the EFTA states have historically abstained
from taking antidumping measures and have never instituted anti-
dumping duties against Chile.169 Following the entry into force of the
158. See ECFTA, supra note 7, art. 2.

159. See id. art. 18.
160. See id. ch. VI.
161. See id. art. 73.
162. See id. art. 74.
163. See id. art. 75.
164. See id. art. 76.
165. See Statistics, NATIONAL CUSTOMS SERVICE, GOBIERNO DE CHILE, http://www.aduana.cl/
prontus_aduana_eng/site/edic/base/port/statistics.html (last visited Nov. 25, 2012).
166. See id.
167. See EFTA States Trade with Chile, 2008 –2010, EUROPEAN FREE TRADE ASSOCIATION,
http://www.efta.int//media/Documents/free-trade/trade-statistics/Chile.pdf (last visited Nov. 25,
2012).
169. See Information from EFTA Secretariat, supra note 154.
2012] 233
ECFTA, there have been no consultations regarding competition law

between the parties under the Article 75 mechanism.170
D. The Closer Economic Partnership Arrangements Between China and

Hong Kong and China and Macau171 (2004)
Both the Mainland and Hong Kong Closer Economic Partnership
Arrangement (Hong Kong CEPA) and the Mainland and Macau Closer
Economic Partnership Arrangement (Macau CEPA) entered into force
on January 1, 2004.172 Both CEPAs are intended to progressively
reduce or eliminate “tariff and non-tariff barriers on substantially all
the trade in goods between the two sides.”173 Article 7 of both agree-
ments prohibits the parties from applying antidumping measures to
each others’ goods.174 Neither of the agreements includes provisions
dealing with competition measures.
The economies of Hong Kong and, to a much lesser extent, Macau
are deeply connected to that of Mainland China. In 2003, forty-four
percent of Hong Kong’s exports were destined for China; that figure
has risen modestly since then and reached fifty-three percent in
2010.175 In 2003, forty-four percent of Hong Kong’s imports came from
China, increasing to forty-five percent in 2010.176 In 2003, fourteen
percent of Macau’s exports were destined for China, increasing to
sixteen percent in 2010.177 In 2003, forty-three percent of Macau’s
imports came from China, and in 2010, thirty-one percent of its
imports came from China.178 On the other hand, trade with Hong
170. See id.

171. China’s agreements with Hong Kong and Macau are substantially similar and will thus
be examined together.
172. See CEPA-HK, supra note 17, art. 3; CEPA-Macau, supra note 17, art. 3.
175. See Hong Kong Statistics: Total Exports to Ten Main Destinations, CENSUS AND STATISTICS
DEPARTMENT, GOVERNMENT OF HONG KONG SPECIAL ADMINISTRATIVE REGION, http://www.censtatd.
gov.hk/hong_kong_statistics/statistical_tables/index.jsp?charsetID⫽1&tableID⫽061&subject
ID⫽3 (last visited Nov. 25, 2012).
176. See Hong Kong Statistics: External Merchandise Trade Statistics by Ten Main Countries/
Territories—Imports from Ten Main Suppliers, CENSUS AND STATISTICS DEPARTMENT, GOVERNMENT
OF HONG KONG SPECIAL ADMINISTRATIVE REGION, http://www.censtatd.gov.hk/hong_kong_statistics/
statistical_tables/index.jsp?charsetID⫽1&tableID⫽057&subjectID⫽3 (last visited Nov. 25, 2012).
177. See External Merchandise Trade Statistics, STATISTICS AND CENSUS SERVICE, MACAO SAR
GOVERNMENT, http://www.dsec.gov.mo/Statistic/ExternalMerchandiseTrade.aspx (last visited
Jan. 3, 2012).
178. See id.
234 [Vol. 44
Kong and Macau, although considerable in real terms, makes up a

relatively small portion of China’s overall international trade. For
example, in 2010, according to the Chinese Ministry of Commerce,
Chinese exports to Macau made up 0.14% of its total exports and
imports from Macau made up a microscopic 0.01% of total imports.179
Further, 13.84% of China’s exports were bound for Hong Kong, and
0.88% of its imports came from Hong Kong.180
The prohibition on antidumping between China and Hong Kong
and China and Macau has had little practical effect. China, a fairly avid
user of antidumping law, has never taken action against either Hong
Kong or Macau since 1997, when its law was established.181 Hong Kong,
a duty-free jurisdiction,182 has no laws regulating antidumping, and it
has never applied such measures.183 The same holds true for Macau.184
Since the CEPAs took effect in 2004, it does not appear that competi-
tion authorities in China, Hong Kong, or Macau have exercised their
competition laws to combat dumping. Macau, for one, does not have a
comprehensive law on competition policy, although the Commercial
Code of 1999 does establish “some general disciplines.”185 In contrast,
China and Hong Kong’s competition laws could in theory be used to
combat predatory pricing, despite the fact that the possibility of adapt-
ing competition law to replace antidumping was not mentioned in
the CEPAs.186 China’s Anti-Monopoly Law, enacted in 2007, expressly
provides for extraterritorial application187 and prohibits abuse of a
dominant position by, among other things, selling at unfairly low
prices, selling at below-cost prices without justification, and discrim-
inatory prices without justification.188 Similarly, Hong Kong’s Competi-
179. See Statistics, MINISTRY OF COMMERCE, PEOPLE’S REPUBLIC OF CHINA, http://english.

mofcom.gov.cn/statistic/statistic.html (last visited Nov. 25, 2012).
180. See id.
182. See WTO Secretariat, Trade Policy Review: Hong Kong, China, WT/TPR/S/241, 22 (Dec. 1,
2010) [hereinafter Hong Kong TPR].
183. See id. at 27.
184. See WTO Secretariat, Trade Policy Review: Macao, China, WT/TPR/S/181, 35 (Apr. 30,
2007) [hereinafter Macau TPR].
185. See id. at 52.
186. See CEPA-HK, supra note 17; CEPA-Macau, supra note 17.
187. See Zhenguo Wu, Perspectives on the Chinese Anti-Monopoly Law, 75 ANTITRUST L. J. 73,
102-03 (2008) (discussing Anti-Monopoly Law of the People’s Republic of China (promulgated by
the Standing Committee of the National People’s Congress, Aug. 30, 2007, effective Aug. 1, 2008)
art. 2 [hereinafter Anti-Monopoly Law]).
188. See Xiaoye Wang, Highlights of China’s New Anti-Monopoly Law, 75 ANTITRUST L. J. 133, 137
(2008) (discussing Article 17 of the Anti-Monopoly Law).
2012] 235
tion Policy Advisory Group, charged with reviewing competition-

related issues,189 has in the past reviewed practices occurring outside
Hong Kong,190 and the Group’s policy statements make clear that
predatory behavior, including selling below cost, may involve an abuse
of market position.191 In practice, however, it seems that neither China
nor Hong Kong’s competition authorities have exercised their powers
to tackle instances of predatory or below-cost pricing in the free trade
areas created by the CEPAs.192
A final consideration that distinguishes the two CEPAs from the
other RTAs discussed is the unique political relationship between the
parties. Commentators have argued that, because Hong Kong’s economy
is already one of the freest in the world, its CEPA with China is “almost a
unilateral gift to Hong Kong.”193 China’s officials and academics note
that the long-term goal of China’s CEPAs is to integrate the economies
of China, Hong Kong, and Macau in preparation for a “Greater China
Economic Circle” (along with Taiwan).194
IV. ARGUMENT
This Section will begin with several preliminary observations about
189. See About COMPAG, COMPETITION POLICY ADVISORY GROUP, THE GOVERNMENT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION, http://www.compag.gov.hk/about (last visited Nov. 25,
2012). The Group has promulgated a Statement on Competition Policy and a set of guidelines. See
id. A Competition Bill is currently being considered in Hong Kong. See id.
190. See COMPETITION POLICY ADVISORY GROUP, THE GOVERNMENT OF THE HONG KONG SPECIAL
ADMINISTRATIVE REGION ANNUAL REPORT 2004 –2005 33 (2005), available at http://www.compag.
gov.hk/report/2004.pdf (declining to take action with regards to imports of live pigs from
Mainland China).
191. See Statement on Competition Policy, COMPETITION POLICY ADVISORY GROUP, THE GOVERN-
MENT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE’S REPUBLIC OF CHINA
(1998), available at http://www.compag.gov.hk/policy/.
192. See ANNUAL REPORTS 2004 –2011, COMPETITION POLICY ADVISORY GROUP, THE GOVERNMENT
OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION, available at http://www.compag.gov.hk/
report; China Competition Bulletin, China Competition Research Centre, available at http://
www.anzsog.edu.au/content.asp?pageId⫽261 (Allan Fells et al. eds., Aug. 2010 to Oct. 2011);
CHINA BRIEFING SERIES, WILMERHALE (Jan. 2009), available at http://www.wilmerhale.com/files/
Publication/da4b96f1-5cb6-49cf-ab43-614a36fedabf/Presentation/PublicationAttachment/
26439542-d8a2-4aa9-97e4-6a1c209c5ed5/China%20Briefing%20Series.pdf; CHINA LAW INSIGHT,
KING & WOOD (Sept. 3, 2010), available at http://www.chinalawinsight.com/2010/09/articles/
corporate/antitrust-competition/two-years-on-ten-antitrust-private-actions. Especially in China,
competition authorities are extremely concerned with rising (rather than below-cost) prices.
193. See Jiangyu Wang, China’s Regional Trade Agreements: The Law, Geopolitics, and Impact on the
Multilateral Trading System, 8 SING. Y.B. INT’L L. 119, 129 (2004).
194. See id. at 130.
236 [Vol. 44
the RTAs just described. Next, it will offer a number of possible

explanations for the prohibition of antidumping and subsequent non-
use of competition law. Third, the Section will argue that antidumping
has been abolished in certain RTAs because it was not being utilized in
the first place because of low bilateral trade, the absence of antidump-
ing regimes, or extraordinary relationships between RTA partners.
Thus, disuse of competition law to combat dumping reflects the
redundancy of the law it has replaced. Finally, the Section will conclude
by exploring the possibility of prohibiting antidumping in future RTAs.
A. Some Preliminary Observations

Three general observations about the RTAs under consideration are
in order. First, prior to the abolition of antidumping under these
agreements, the parties had either ceased pursuing antidumping ac-
tions against each other or, in most cases, had never used antidumping
in the first place. Second, competition law has not been employed
under those RTAs that either explicitly adopt competition law as a
replacement for antidumping law or require the parties to cooperate
on competition matters, generally or through a notification process.
Nor have the CEPA parties exercised competition law as a tool against
antidumping in the wake of its prohibition in the agreements. Third,
the parties to the agreements that have prohibited antidumping gener-
ally, but not always, have a limited amount of bilateral trade. Indeed, in
some cases, it is not a stretch to say that bilateral trade between the
parties is inconsequential.
B. Explaining the Prohibition of Antidumping

1. The Arbitrage Theory
There are a number of theories that might explain the ability and
willingness to prohibit antidumping in the selected RTAs. The first is
that, essentially, the removal of trade barriers under a trade agreement
eliminates the possibility of dumping through greater opportunities for
arbitrage; thus, antidumping is no longer a useful tool in governments’
arsenals.195 Removal of trade barriers in a free trade area should in
theory reduce market segmentation,196 that is, restricted contact be-

196. See Tony Dellow & John Feil, Competition Law and Trans-Tasman Trade, in COMPETITION
LAW AND POLICY IN NEW ZEALAND 24, 36 (Rex J. Ahdar ed., 1991).
2012] 237
tween different customers or suppliers.197 If different customers do not

know what prices others are paying or cannot resell goods to them, as
occurs in a segmented market, price discrimination between different
parts of the market becomes possible.198 But, theoretically, in a free
trade area, customers’ and suppliers’ information on pricing elsewhere
in the market is better and their ability to resell is greater. Thus,
“[p]rice differentials . . . could therefore be expected to be quickly
arbitraged away,”199 making antidumping law unnecessary.
Cunningham and LaRocca reiterate this theory and take it one step
further by cautiously approving the possibility of replacing antidump-
ing with competition law within regional economic arrangements.200
The authors proffer the argument that:
[D]umping is often the result of market power created by entry

barriers that protect domestic industries from external compe-
tition: monopoly profits accumulated by these industries allow
them to “dump” products in other markets in order to establish
market power in those other markets. If regional arrangements
reduce the entry barriers that make dumping possible, dump-
ing is less likely to occur. Furthermore, if regional arrange-
ments facilitate the enforcement of competition laws among
member states, any abuses of market power that do occur
through predatory or discriminatory pricing can be challenged
under general competition law standards.201
Cunningham and LaRocca thus conclude that replacing antidump-

ing with competition law would significantly reduce the number of
unfair pricing cases because of the higher standard involved in anti-
trust cases.202 But they also allude to the difficulty of implementing
such a change due to the “political economy of protectionism” prob-
lem203 and the challenge of creating an acceptable and effective
197. See Segmented Market Definition, A DICTIONARY OF ECONOMICS (John Black et al. eds., 2009).
198. See id.
199. See Dellow & Feil, supra note 196, at 36.
200. See Stewart & Brightbill, supra note 12, at 942 (interpreting Richard Cunningham &
Anthony LaRocca, Harmonization of Competition Policies in a Regional Economic Arrangement, 27 LAW &
POL’Y INT’L BUS. 879, 889 (1996)).
201. See Cunningham & LaRocca, supra note 200, at 889.
202. See id. at 890 n.43.
203. As discussed previously, because those who are likely to lose from free trade, namely,
import-competing industries, are not compensated by those who gain from free trade, they have
238 [Vol. 44
harmonized competition law standard.204

The arbitrage explanation, although sound in theory, suffers from
several important flaws. In challenging Cunningham and LaRocca’s
apparent approval of the replacement of antidumping with competi-
tion law, Stewart and Brightbill note that even after the elimination of
formal trade barriers via the creation of an RTA, significant non-tariff
barriers often remain.205 In addition, Stewart and Brightbill emphasize
that the existence of a free trade area or any other RTA “does not imply
that dumping has disappeared.”206 As demonstrated by the continued
existence of price discrimination within the United States, for instance,
dumping survives even if the barriers to the re-export of dumped goods
are eliminated.207 One reason that dumping survives is that re-export
of dumped intermediate goods, that is, goods used as inputs for
production,208 will not occur even in the absence of trade barriers
because the end-user has already benefited from having purchased
inputs at a reduced price and thus has nothing to gain from arbi-
trage.209 However, even assuming that the purchaser of dumped goods
has an incentive to re-export, the dumped goods may be export goods
exclusively, so that the purchaser will be unable to re-export even if it
has an incentive to engage in arbitrage.210
Even apart from the flaws discussed above, arbitrage cannot ad-
equately explain the ability of the parties to the RTAs under consider-
ation to abandon antidumping. Under the arbitrage theory, one would
observe a certain number of antidumping cases prior to the creation of
the RTA, followed by a steadily decreasing number of competition
actions as a replacement for antidumping after its prohibition. How-
ever, with the possible exception of ANZCERTA, this has not occurred
an “incentive to strive for protection through the political process of trade policy making.” See
Tharakan, supra note 47, at 1552.
204. See Cunningham & LaRocca, supra note 200, at 890. According to Cunningham and
LaRocca, harmonization of competition law not only encompasses substantive legal standards but
also procedural rules and enforcement practices, which are crucial in the competition setting. See
id. at 881. After reviewing the approaches taken by the EU, EFTA, EEA, Europe Agreements, and
ANZCERTA, the authors conclude that harmonizing competition law and policy is an “integral
part of effective economic integration in regional trade arrangements . . . . ” See id. at 901.
205. See Stewart & Brightbill, supra note 12, at 942-43.
206. See id. at 942.
207. See Jorge Miranda, Should Antidumping Laws be Dumped?, 13 LAW & POL’Y INT’L BUS. 255,
281 (1996).
208. See Intermediate Good, A DICTIONARY OF ECONOMICS (John Black et al. eds., 2009).
209. See Miranda, supra note 207, at 281.
210. See id.
2012] 239
in any of the RTAs considered, which have been characterized by an

absence of antidumping measures before entry into force and a corre-
sponding absence of competition actions afterwards. As concerning
ANZCERTA, it is true that after the initial signing of the Closer
Economic Relations agreement in 1983, cases of dumping between
Australia and New Zealand were rare and declining. However, elimina-
tion of antidumping was implicitly tied to the transition to full free
trade,211 meaning that tariff barriers remained until the prohibition of
antidumping in 1990, undercutting the arbitrage theory.212 While the
possibility of arbitrage may have played some limited role in bringing
about the abolition of antidumping between Australia and New Zea-
land, there are other more important factors, as will be discussed
below.
2. The “Attrition” Theory

Somewhat related to the arbitrage hypothesis is the “attrition” theory.
Some commentators argue that within free trade areas, natural attri-
tion of antidumping use may occur without any change in the legal
regime.213 The parties within such free trade areas would then be more
inclined to abolish the use of antidumping remedies against each
other. The reasons for such attrition are at least two-fold. First, as tariff
and non-tariff trade barriers are reduced, “mutual cutthroat competi-
tion becomes more practical.”214 When firms in Market A dump in
Market B, and vice versa, all firms will be less likely to bring antidump-
ing actions against their competitors for fear of retaliation and the
specter of local public officials lending a “friendly ear to ‘echo’
investigations.”215 Second, mutual direct investment, encouraged by
free trade areas, tends to reduce antidumping use: “It is one thing to
211. See Bernard Hoekman, Competition Policy and Preferential Trade Agreements 10 (World
Bank, Working Paper, 2002), available at http://cdi.mecon.gov.ar/biblio/docelec/tb1015.pdf.
212. See also C. Angel et al., Product Characteristics and Arbitrage in the Australian and New
Zealand Wool Markets, 34 AUSTL. J. AGRIC. ECON. 67, 78 (1990) (finding no evidence of price
premiums associated with country of origin in Australia-New Zealand wool trade), available at
http://ageconsearch.umn.edu/bitstream/22501/1/34010067.pdf. An in-depth microeconomic
study of the role of arbitrage in the Australia-New Zealand trade relationship during the 1980s and
1990s is obviously beyond the scope of this Note but would constitute an interesting contribution
to scholarship on arbitrage within RTAs.
213. See Gary Hufbauer, Antitrust and Antidumping: Forever Separate Tables?, 47 N.Y.L. SCH. L.
REV. 141, 144-45 (2003); Miranda, supra note 207, at 281-82.
214. See Hufbauer, supra note 213, at 145.
215. See id. Although not explicitly described by Hufbauer, an “echo” investigation is initiated
by one trade partner in its home state against a foreign trade partner in retaliation for the latter’s
240 [Vol. 44
bring an [antidumping] action against a totally foreign company; it is

another thing to bring an action against the foreign subsidiary of a
domestic competitor.”216
The attrition theory is unsatisfactory in explaining the abolition of
antidumping in the RTAs considered here. With the exception of
ANZCERTA and the CCFTA, the prohibition on antidumping oc-
curred simultaneously with the reduction of tariff barriers. Thus,
“attrition” and the easing of trade relations would occur after the
prohibition on antidumping. But, under the attrition theory, the
prohibition on antidumping becomes possible as a result of reduced
trade barriers. In the cases of ANZCERTA and the CCFTA, if the
attrition hypothesis were sound, one would expect to observe a certain
number of antidumping cases prior to the creation of the RTA,
followed by a decreasing number of cases until the prohibition of
antidumping. This did not occur between Canada and Chile, although
attrition might possibly explain the decrease in antidumping cases
between Australia and New Zealand. In sum, the attrition theory suffers
from a logical disconnect and cannot adequately explain the prohibi-
tion of antidumping.
3. The “Broader Push for Integration” Theory

A third theory, articulated by Hoekman, argues that it is the broader
push for economic integration between RTA parties which leads them
to abandon antidumping. Hoekman examined the relationship be-
tween antidumping and antitrust in a number of RTAs, including the
European Economic Area Agreement, ANZCERTA, NAFTA, the South-
ern Cone Market, the Asia Pacific Economic Cooperation Agreement,
and the Free Trade Area of the Americas.217 Hoekman argues that the
impetus to eliminate antidumping remedies within RTAs is the broader
push for economic integration and, relatedly, the desire to “extract
concessions” from other parties to the agreement.218 As for competi-
tion law, “[a]greement to coordinate or even agree on common
antitrust rules is neither necessary or [sic] sufficient to allow anti-
initiation of a trade practices investigation abroad. See id. Presumably, a local public official will be
more receptive to such an investigation. See id.
216. See id. As an example, Hufbauer cites the high incidence of antidumping actions in the
steel industry as correlative of the low incidence of foreign direct investment in that industry. See
id.
217. See Bernard Hoekman, Free Trade and Deep Integration: Antidumping and Antitrust in
Regional Agreements 9-13, 35 (World Bank, Working Paper, 1998).
218. See id. at 36.
2012] 241
dumping to be eliminated.”219 Finally, Hoekman suggests that govern-

ments may be willing to abandon antidumping in RTAs to the extent
that the trade agreement “imposes disciplines on the ability of govern-
ments to directly intervene in or support domestic industries.”220
The “broader push for integration” explanation largely fails, with the
possible exceptions of ANZCERTA and the CEPAs. As discussed at
length in Part IV, in the RTAs between Canada and Chile, EFTA and
Singapore, EFTA and Chile, and China and Macau, economic integra-
tion as measured by bilateral trade between the parties is markedly low
and in some cases inconsequential. Deep economic integration is
unlikely across the distances separating Canada and Chile, and the
EFTA states from Chile and Singapore. Furthermore, with anti-
dumping having fallen into near complete disuse among all the trade
partners in the RTAs discussed, a mutual prohibition of antidumping
hardly seems like a “concession” to be “extracted” in the drive towards
integration; instead, it is more similar to the relinquishment of an
unexercised right. For most of the RTAs considered here, the move-
ment for greater economic integration is an insufficient explanation
for the prohibition on antidumping.
C. Explaining the Disuse of Competition Law in the Wake of the

Prohibition of Antidumping
1. Competition Law May Not Be Well-Suited to Tackle Dumping
Numerous commentators have urged that competition law is not
well suited for addressing trade practices normally reserved for anti-
dumping law.221 For example, according to Ahdar, although dumping
might be viewed as a kind of “international monopolization by means
of predatory pricing” and could thus be combated through competi-
tion law, there are several important differences between dumping and
international predatory pricing.222 First, unlike dumping, predatory
pricing requires the notion of below-cost sales (at least in the United
States).223 Second, unlike in antidumping investigations, in antitrust
proceedings the defendant must possess substantial market power or a
219. Id.
220. See id. at 36-37.
221. See, e.g., Ahdar, supra note 13, at 325; Stewart & Brightbill, supra note 12, at 941;
Hufbauer, supra note 213, at 143-44.
222. See Ahdar, supra note 13, at 326-27.
223. See id. (qualifying this distinction by pointing to the ongoing debate over what consti-
tutes cost exactly and how it is measured).
242 [Vol. 44
dominant market position.224 Third, competition focuses on the defen-

dant’s purpose, whereas antidumping concentrates on the effects of
the defendant’s conduct.225 Furthermore, practical problems with
predatory pricing remain, including the difficulty of sustaining such an
allegation and preventing such conduct.226
Stewart and Brightbill also highlight the predatory pricing problem
and the inability of antitrust law to combat it.227 Predatory pricing exists
where “(1) the competitor is in a non-sustainable position and is going
out of business; (2) the competitor is being subsidized by a government
or a third party; or (3) the competitor is cross-subsidizing its losses with
supracompetitive profits elsewhere.”228 U.S. trade law addresses the
third situation by prohibiting sales below cost over an extended period,
but antitrust law has more limited and less effective remedies because,
first, the federal circuit courts are split over the exact definition of
predatory pricing, and second, the Supreme Court has held that
predatory pricing is only unlawful when the competitor has a reason-
able prospect of recovering its earlier losses in the relevant market.229
Stewart and Brightbill urge that “competition policy be modified to
include an antidumping regulatory scheme dealing with below-cost
sales,” as predatory pricing is just as likely to occur within RTAs and
trade law is better equipped to deal with the problem.230
2. Uncharted Territory for Competition Authorities

Even assuming that competition law might be able to effectively
combat dumping, it does not necessarily follow that competition law
would be administered successfully. In order to enforce laws proscrib-
ing predatory pricing, price discrimination, or abuse of dominant
position transnationally rather than domestically, competition authori-
ties must confront new and challenging practical hurdles not previ-
ously faced. For example, in the United States and other nations,
measurement of price differences by trade authorities differs substan-
tially from analysis of price discrimination by antitrust authorities.231
224. See id. at 327.

225. See id.
226. See id. at 327-28.
227. See Stewart & Brightbill, supra note 12, at 941.
228. See id.
229. See id.
230. See id. at 942.
231. See Ronald A. Cass, Price Discrimination and Predation Analysis in Antitrust and International
Trade: A Comment, 61 U. CIN. L. REV. 877, 880 (1993).
2012] 243
Competition authorities, accustomed to conducting investigations and

gathering evidence in the domestic setting, may not be equipped to do
the same abroad, even if the country of export, an RTA partner, is
familiar. More generally, competition authorities may simply lack the
institutional experience and human capital to confront the practice of
dumping.
3. Antidumping and Competition Are Unrelated

One explanation for the disuse of competition law may be quickly
dismissed. According to Hoekman, there is no “direct link” between
abolition of antidumping and convergence of antitrust regulation.232
The notion that the prohibition of antidumping and decision to
coordinate competition policy are unrelated, however, is directly con-
tradicted by the undertakings of the parties themselves. For example,
the EFTA-Singapore FTA provides that “[i]n order to prevent dump-
ing, the Parties shall undertake the necessary measures as provided for
under Chapter V,” which addresses the use of competition law.233 Only
the CEPA agreements do not explicitly mention competition in the
wake of the abolition of antidumping.234
D. Antidumping is a Dead Letter and May Thus Be Replaced by

Competition Law, “a Weaker Form of Control” 235
The previously articulated explanations for the prohibition of anti-
dumping and the subsequent non-use of competition law overlook a
simpler yet more coherent explanation. The member states of the
RTAs under consideration have been able to “dump” antidumping
because it had become an unexercised right—a dead letter—as be-
tween the parties for either economic or legal reasons. In some cases,
competition law is chosen as an acceptable substitute for antidumping;
with antidumping actions so infrequent, competition law serves as a
“backstop” of sorts, prepared to catch any particularly egregious con-
duct. In other cases, the parties do not feel the need to replace
antidumping with any alternative.
Ahdar made this basic argument in his examination of ANZCERTA.
Ahdar notes that both Australia and New Zealand’s antidumping laws
had been used sparingly following the entry into force of the parties’
232. See Hoekman, supra note 217, at 35.

233. See ESFTA, supra note 16, art. 16.
234. See CEPA-HK, supra note 17; CEPA-Macau, supra note 17.
244 [Vol. 44
Closer Economic Relations agreement.236 According to Ahdar, then,

“[t]he antidumping laws had become largely redundant even before
full free trade materialized. Their abolition and replacement with a
weaker form of control (antitrust) thus represents little change.”237
However, the explanation is applicable not only to ANZCERTA but also
to the other RTAs considered here. For either economic or legal
reasons, antidumping had become an unexercised right between the
parties and could thus be eliminated without damaging consequences.
1. Economic and Legal Reasons for the Redundancy of

Antidumping
In most of the RTAs considered in this Note, bilateral trade between
the parties was so low prior to the signing of the respective agreements
that antidumping was unnecessary as a practical matter. Recall some of
the statistics presented in Part IV. During the second half of the 1990s,
around the creation of the Canada-Chile FTA, bilateral trade flows
represented 1.5% of Canada’s total and 0.1% of Chile’s.238 In 2001, one
year before the EFTA-Singapore FTA was inked, the EFTA states
exported USD$1.24 million in goods to Singapore and imported
USD$312 million in goods from Singapore,239 relatively scant numbers
for industrialized economies. In 2003, the year the EFTA-Chile FTA was
signed, only 0.6% of Chile’s total exports were bound for an EFTA state
and just 0.8% of its imports came from an EFTA state.240 Even in
ANZCERTA and the CEPAs, levels of bilateral trade do not approach
those found in trade relationships that witness the bulk of antidumping
cases, for instance, the United States and Canada or the European
Union.
Furthermore, as a legal matter, many of the parties to the RTAs
considered in this Note either explicitly spurn antidumping as contrary
to the purposes of trade liberalization or do not maintain the necessary
legal structures to use the remedy for whatever reason. The EFTA states
have never applied antidumping measures because “such measures are
arguably not in line with the aims of a Free Trade Agreement and the
objectives of Article XXIV GATT, i.e., the opening of markets through
236. See id.

237. See id.
238. See de Araujo Jr., supra note 130, at 570.
239. See Free Trade Agreement between the EFTA States and Singapore, supra note 149.
240. See Statistics, NATIONAL CUSTOMS SERVICE, GOBIERNO DE CHILE, supra note 165.
2012] 245
the elimination of trade barriers.”241 Similarly, Hong Kong and Macau

do not have antidumping laws and have never taken antidumping
measures in the past.242
2. ANZCERTA and the CEPAs: Extraordinary Agreements

As noted earlier, the arbitrage, attrition, and “broader push for
integration” theories for the prohibition of antidumping, inapplicable
to many of the RTAs considered in this Note, may to varying extents
explain the prohibition under ANZCERTA and the CEPAs. An addi-
tional explanation for this prohibition may be the unique relationships
of the parties to these three agreements. Australia and New Zealand
and China, Hong Kong, and Macau are geographically close, culturally
similar, and historically connected, both economically and politically.
Australia and New Zealand have reasonably similar standards of liv-
ing.243 China, Hong Kong, and Macau may one day form a “Greater
China Economic Circle.”244 In sum, the countries within these two
blocs are substantially similar. Dumping may be a more serious prob-
lem among countries with vastly different economies,245 another factor
that partially explains the absence of antidumping action and decision
to prohibit the remedy altogether.
3. Competition Law: a “Backstop” Against the Possibility of Dumping

The insignificance of the antidumping laws prior to their abolition,
whether resulting from economic or legal reasons, also explains why
the parties have not utilized competition law in those RTAs in which it
has been approved as a substitute for antidumping. Arguments that
competition law is unsuited to combat dumping or competition authori-
ties are incapable of dealing with unfair trade practices become irrel-
evant in light of the fact that dumping had ground to a halt in all of the
free trade areas under consideration. If the remedy of antidumping is
unnecessary, it follows that the replacement for that remedy—
competition law—will be redundant. This is not to say that replacement
of antidumping with competition law is unimportant. Competition law
241. See Information from EFTA Secretariat, supra note 154.

242. See Hong Kong TPR, supra note 182; Macau TPR, supra note 184.
243. As of 2009, Australia’s GDP per capita was USD $42,131; New Zealand’s was USD
$29,352. See World Development Indicators, WORLD BANK, available at http://data.worldbank.org/
data-catalog/world-development-indicators (last visited Nov. 25, 2012).
244. See Wang, supra note 193, at 130.
245. See Stewart & Brightbill, supra note 12, at 943.
246 [Vol. 44
might be viewed as a “backstop” or a protective measure of last resort,

unneeded at present but prepared to catch any occurrences of below-
cost imports from RTA partners.
E. Implications for Future RTAs

As the foregoing discussion should indicate, antidumping in re-
gional trade agreements is not going anywhere. The RTAs considered
in this Note support rather than undercut the argument for the
continuing import of antidumping in the world trading system: of the
myriad RTAs that have been inked, only six have been able to abolish
the use of antidumping remedies. Those six that have been able to
comfortably ban the remedy’s use have very low levels of bilateral trade,
legal aversions to antidumping, or extraordinary relationships; in all
cases, antidumping between the parties was a dead letter. For the rare
trade agreement in which the parties share one or more of those
characteristics, prohibiting antidumping might be a viable option,
whether as a means to improve economic integration, provide export-
ing industries with security from the threat of antidumping, or hold out
a diplomatic courtesy. However, the majority of RTA partners will not
be able to afford to abandon antidumping, and indeed, they should
not.
This is because antidumping serves important purposes. It protects
domestic industries from surges of inexpensive foreign imports.246 It
allows governments to temporarily protect national economies against
fluctuations in trading patterns.247 It provides flexibility to govern-
ments, which must adjust to economic shocks while simultaneously
opening domestic markets to international competition.248 Antidump-
ing thus functions as an important “pressure valve,”249 allowing global
trade liberalization to continue despite opposing domestic impulses.
Indeed, RTA parties which retain antidumping may see greater rather
than reduced economic integration through this pressure valve mecha-
nism.
246. See Anti-Dumping Summary, CENTER FOR INTERNATIONAL DEVELOPMENT AT HARVARD

UNIVERSITY, http://www.cid.harvard.edu/cidtrade/issues/antidumping.html (last visited Nov. 25,
2012).
247. See id.
248. See id.
249. See id.
2012] 247
V. CONCLUSION
The prohibition of antidumping found in the Australia-New Zealand
Closer Economic Relations Trade Agreement, Canada-Chile FTA, EFTA-
Singapore FTA, EFTA-Chile FTA, and Closer Economic Partnership
Arrangements is a rare and perhaps bold departure from most RTAs, in
which antidumping is retained as permitted under the law of the World
Trade Organization. However, it is very improbable that prohibiting
antidumping will become standard practice in RTAs. In some circum-
stances, it is true, dumping between RTA partners may subside due to
arbitrage, attrition, or increased integration. But even then, antidump-
ing remains an important mechanism to preserve the gains of trade
liberalization of the past decades. The more likely context for future
prohibitions of antidumping between RTA partners will mirror the
trade relationships examined in this Note, where antidumping is
unutilized as a practical matter due to very low levels of bilateral trade,
legal aversion to antidumping, or extraordinary relationships in which
dumping is rare.
248 [Vol. 44

A Right Unexercised Is A Right Lost?: Abolishing Antidumping in Regional Trade Agreements

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A Right Unexercised Is A Right Lost?: Abolishing Antidumping in Regional Trade Agreements

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NOTES

A RIGHT UNEXERCISED IS A RIGHT LOST?:

A. Australia-New Zealand Closer Economic Relations Trade

1. See generally Rafael Leal-Arcas, Proliferation of Regional Trade Arrangements: Complementing or

RTAs allow the use of a certain remedy in a proscribed manner,8 and

willingness to prohibit antidumping. Finally, competition law, al-

II. THE LAW GOVERNING REGIONAL TRADE AGREEMENTS

A. Regional Trade Agreements

18. See GATT, supra note 2, art. I:1.

different basis for an RTA.

that such agreements have “substantial sectoral coverage” and elimi-

B. Trade Remedy Provisions in RTAs

37. See GATS, supra note 26, art. V:1.

C. Trade Remedy Configurations in RTAs

of the size of intraregional trade, level of integration between the

50. See Prusa, supra note 6, at 184.

The six remaining RTAs in which antidumping is completely pro-

D. Antidumping and Antitrust: Common Enemies, Divergent Methods

antidumping and competition law take aim at the problem of discrimi-

68. See id.

(EU).77 Article 26 of the agreement that created the EEA essentially

III. REGIONAL TRADE AGREEMENTS IN WHICH ANTIDUMPING IS PROHIBITED

the agreements’ provisions regarding antidumping and competition

A. Australia-New Zealand Closer Economic Relations

However, modification of domestic antitrust law had begun prior to

93. See Ahdar, supra note 13, at 321-22.

eliminate any person or business from that or any other market.101

Australia and New Zealand’s use of antidumping remedies was

B. Canada-Chile Free Trade Agreement (1997)

114. See CCFTA, supra note 10.

otherwise substantially affect the other Party’s interests.”125

125. See id. art. L-03.

billion in 2011.134 Chilean exports to Canada have especially benefited,

C. Agreements of the European Free Trade Association

its members are Iceland, Norway, Liechtenstein, and Switzerland.141

1. EFTA-Singapore Free Trade Agreement (2003)

goods to Singapore and imported USD$312 million in goods.149 By

2. EFTA-Chile Free Trade Agreement (2004)

stated objectives include the achievement of “progressive and recipro-

158. See ECFTA, supra note 7, art. 2.

ECFTA, there have been no consultations regarding competition law

D. The Closer Economic Partnership Arrangements Between China and

170. See id.

Kong and Macau, although considerable in real terms, makes up a

179. See Statistics, MINISTRY OF COMMERCE, PEOPLE’S REPUBLIC OF CHINA, http://english.

tion Policy Advisory Group, charged with reviewing competition-

the RTAs just described. Next, it will offer a number of possible

A. Some Preliminary Observations

B. Explaining the Prohibition of Antidumping

195. See Ahdar, supra note 13, at 328.

tween different customers or suppliers.197 If different customers do not

[D]umping is often the result of market power created by entry

Cunningham and LaRocca thus conclude that replacing antidump-

harmonized competition law standard.204

in any of the RTAs considered, which have been characterized by an

2. The “Attrition” Theory

bring an [antidumping] action against a totally foreign company; it is

3. The “Broader Push for Integration” Theory

dumping to be eliminated.”219 Finally, Hoekman suggests that govern-

C. Explaining the Disuse of Competition Law in the Wake of the

dominant market position.224 Third, competition focuses on the defen-

2. Uncharted Territory for Competition Authorities

224. See id. at 327.