ABSTRACT
The acceleration in globalization witnessed over the past two decades and the corresponding increased exposure to competition from low-price producers in China and other developing nations have created a new economic environment. Since production costs-especially those that are wage related-cannot be infi nitely reduced, the main way for manufacturing fi rms in those economies to position themselves in domestic and international markets is to focus on offering upgraded and differentiated rather than “mundane” labor-intensive products. However, in an effort to increase market share, many producers and their governments are resorting to unfair trade practices. For example, in October 1999, the World Trade Organization (WTO) dispute resolution panel, responding to a complaint brought by the EU, concluded that the foreign sales corporation program relating to the U.S. tax treatment of its foreign sales corporations constituted an illegal export subsidy and requested its removal. Similarly in 2010, the WTO panel found that U.S. antidumping measures taken against Thailand’s exports of merchandise bags were inconsistent with the WTO agreement. The United States has prevailed in several cases pertaining to unfair trade practices affecting its domestic industries.
