| Summary: | I evaluate four possible approaches the United States may take to address China's practice of undervaluing the renminbi: 1) a challenge under Article XV of the GATT and the associated IMF provisions; 2) countervailing duties; 3) antidumping measures; and 4) safeguard measures. I conclude that the first three approaches are unlikely to succeed; there are a number of legal and political obstacles to the pursuit of these remedies. While the current WTO safeguards regime is likely insufficient, a new safeguards regime can--and should--be developed. I review and critique Dani Rodrik's proposal for a new safeguards regime and set out my own basic blueprint for a significantly expanded safeguards regime, emphasizing that flexibility in the realm of international trade law would help to secure overall stability in international trade itself. In order to be effective shock absorbers, safeguards must become far more flexible.
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