US-Shrimp II (Vietnam): Dubious Application of Anti-Dumping Duties - Should Have Used Safeguards

Abstract

This article explores the idea that the USDOC imposed anti-dumping duties on Vietnamese shrimp producers despite the fact that the surge of shrimp imports giving rise to the duties may have come from elsewhere in the developing world. We argue that Vietnam's shrimp exporters may have been subject to anti-dumping duties because Vietnam has 'non-market economy' (NME) status in the United States. This makes it possible to levy higher duties against Vietnamese firms. We make the point that it was particularly inappropriate to impose anti-dumping duties against the Vietnamese shrimp industry because this industry shows clear indications of being perfectly competitive, whereby firms cannot dump. This in turn raises the question of how the USDOC was able to construct a dumping case where apparently none could have existed. Use of the 'zeroing' methodology, in conjunction with Vietnam's NME status, turns out to be central to the answer. The broader issue is that anti-dumping duties are overused where safeguards would be more efficient. The analysis is relevant for the current controversy over China's NME status with a number of its trading partners.