Currency Manipulation and WTO Laws : Should the Anti-Dumping Mechanism Be Entirely Dumped?

Currency devaluation resembles subsidy and dumping in terms of its impact on global trade – it grants price advantages to exporting companies. Unlike subsidy and dumping, however, multilateral regulation of currency manipulation, which is principally exercised by the IMF, is far from sufficient. Meanwhile, the WTO, whose core principles are undermined by currency manipulation, plays no role in the regulatory framework. Against this background, this paper discusses possible avenues for the WTO to combat currency manipulation in future negotiations. Particularly, it proposes a new approach, which is to allow the application of the surrogate price method in anti-dumping investigations against currency manipulators. The anti-dumping mechanism has long been overlooked in the relevant literature as it is believed to combat company-level activities rather than state-level activities. By proposing the new approach, this paper does not argue to identify currency manipulation as a dumping activity. Rather, it proposes to treat fundamental exchange rate misalignment as a special market condition which allows anti-dumping investigation authorities to use the surrogate price method to eliminate the trade distortion caused by it