Countries such as the United States, Australia, New Zealand, and the members of the European Union pride themselves on being free traders. Yet they often protect favored domestic industries from foreign competition by applying punitive tariffs to imports they think are being "dumped" on the cheap. As developing countries have rhetorically embraced free trade in recent years, they've also embraced the protectionism favored by First World free traders. During the first half of the 1990s, countries that have traditionally used punitive tariffs initiated 63 percent of all anti-dumping proceedings worldwide, according to a recent Cato Institute study. From 1995 through 1999 the situation reversed, and developing countries initiated 59 percent of all anti-dumping proceedings. The United States, which aggressively protects its steel industry, is now the third-largest target of anti-dumping measures, behind China and Japan.
"The rapid spread of anti-dumping protectionism throughout the world threatens to undo many of the liberalizing gains made through the elimination of quotas and import licenses and the slashing of tariff rates," the study notes. Perhaps it's time for U.S. trade bureaucrats to forget about steel and get serious about anti-dumping reform.
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