1. Objectives: Summarize use of trade remedy law (TRL) w.r.t. agriculture in NAFTA countries. Present empirical evidence of “investigation” and “trade diversion” effects in agricultural cases. Trade Remedy Laws & NAFTA Agricultural Trade C. Carter & C. Gunning-Trant UC Davis INTERNATIONAL AGRICULTURAL TRADE DISPUTES: CASE STUDIES IN NORTH AMERICA

2. Trade Remedy Law (TRL) Similar TRL (AD, CVD and Safeguard) is used in U.S., Mexico and Canada. TRLs have been amended over time to make it easier to receive protection. Increased global trend in filing of trade remedy cases (4 main reasons) TRLs are viewed as disguised protectionism but TRLs are in compliance with WTO.

3. How many cases are we talking about? AD & CVD Cases initiated between 1984-2000:  U.S. 761 {71 agricultural (9.3%)}  Canada 334{22 agricultural (6.6%)}  Mexico 219{23 agricultural (10.5%} Agric. Cases (1980-2000):  U.S.: 62% AD & 38% CVD  Canada: 73% AD & 27% CVD Affirmative Ruling in Agric. Cases (1980-2000):  U.S.: 54%Canada: 82%

4. a. U.S. 1980 to 2000 ADCVDTotal Affirmative231235 Negative9817 Suspended or Terminated8513 Total agricultural AD/CVD402565 Source: compiled from U.S. International Trade Commission, “Case Statistics,” Memorandum, Public Version, November 8, 2001. b. Canada 1980 to 2000 ADCVDTotal Affirmative19827 Negative516 Total agricultural AD/CVD24933 Source: Compiled from Canadian International Trade Tribunal, www.citt.gc.ca. Canadian and U.S. AD/CVD Ag Rulings 82% success 54% success

5. Weighted % Change in Value of U.S. Imports: 69 Agric. Cases (1980-2000)

6. Econometric Results Data: US AD and CVD ag real import values, 1980-2000, affirmative rulings only For every 10% increase in duty  5.6% drop in import value $ change from initiation year (t o ) to (t+3) –Named countries: $41M  $22M (-46%) –Non-named countries:$64M  $88M (+38%) N.B. Effect of Trade diversion endures beyond the year of investigation.

7. Conclusion NAFTA members are large users of TRL. Use of TRL is on the rise worldwide, especially by developing countries. For agricultural cases, from 1980 to 2000, the evidence is consistent with “trade diversion” on positive rulings and an “investigation effect” on negative rulings. This is all the more reason to keep TRL on the negotiating table.