Journal of Korea Trade

Korea Trade Research Association (한국무역학회)
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Legal Implications of U.S. CVD on Tires and Undervalued Currency in the WTO's SCM

  • Received : 2023.05.01
  • Accepted : 2023.10.13
  • Published : 2023.10.31
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Abstract

Purpose - This paper examines whether the imposition of countervailing duties by the United States on undervalued foreign currency is legally consistent with the WTO's SCM Agreement. Design/methodology - The study uses a methodology that involves analyzing relevant WTO agreements, prior panel reports, Appellate Body decisions, and other legal documents. Findings - The findings suggest that to impose countervailing duties, certain legal requirements must be met, including financial contribution, benefit, and specificity. The paper also notes that when calculating the benefits of undervalued foreign currency, losses from import activities due to currency undervaluation must be considered. Additionally, classifying all exports to the US under specific industries or business groups is likely to be inconsistent with the SCM Agreement. Originality/value - Even the US countervailing measures on exchange rate subsidies may not comply with WTO regulations due to incorrect calculation of benefits and a lack of specificity, however, it suggests that when intervening in the foreign exchange market, the measures should aim to achieve only minimum policy goals.

Keywords

Acknowledgement

The Department of International Trade was supported through the Research-Focused Department Promotion & Interdisciplinary Convergence Research Project as a part of the Support Program for University Development for Dankook University in 2023

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