Anti Dumping

Topics: World Trade Organization, European Union, United States Pages: 22 (7339 words) Published: August 8, 2013
ANTI-DUMPING: PROBLEMS IN INTERNATIONAL TRADE

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Anti-dumping: A Growing Problem in International Trade
Thomas J. Prusa
Rutgers University

1. INTRODUCTION

F

OR most of its 100 years of existence, anti-dumping (AD) was not nearly the problem that it is today. In fact, for most of its existence it is fair to say that AD could hardly have been called a problem for the international trading community. Over its first 70 years, AD was neither widely adopted nor were AD duties widely imposed by the handful of countries who were AD users. Over the last 30 years, however, AD has emerged as the leading obstacle to the free and fair trading system established under the GATT/WTO. AD a problem? For some this statement must seem odd. Isn’t AD the policy that corrects a dumping problem? The short answer, is ‘no’. As it turns out, the link between dumping and anti-dumping duties is tenuous. A century ago one could plausibly argue that predatory dumping was more of a problem than antidumping. The same cannot be said today. WTO-sanctioned use of AD surely causes more injury than any reasonable person’s notion of economically harmful dumping. Today AD is a bigger problem for international trade than economically meaningful dumping (Miranda, Torres and Ruiz, 1998; Shin, 1998; Prusa, 2000; Zanardi, 2004; and Blonigen, 2003). To borrow an analogy, I am arguing that the medication (anti-dumping) is more harmful than the disease it was originally intended to treat (economically harmful dumping). One of the goals of this paper is to explain how this can be. There are two primary points to my argument. First, there is the proliferation problem. To continue the analogy, the amount of medication being administered exceeds what any reasonable doctor would prescribe to treat the disease. Second and perhaps more disconcerting it turns out that modern AD law has nothing to do with economically harmful practices; rather, AD is just a cleverly designed

The author wishes to thank the WTO Rules Division and Jorge Miranda in particular and for making the WTO AD Measures Database available. As always, all mistakes and errors are the author’s responsibility. © Blackwell Publishing Ltd 2005, 9600 Garsington Road, Oxford, OX4 2DQ, UK © Blackwell Publishing Ltd 2005 02148, USA and 350 Main Street, Malden, MA

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form of protectionism. In other words, not only is too much medication being administered but the medication has nothing to do with the disease it is supposedly intended to be addressing. Section 2 discusses the proliferation issue. I will show that AD is used more frequently, by more countries, and against more products than ever in its history. AD is no longer being used solely by high-income developed countries. It is increasingly being used by middle- and even lower-income countries. At least as worrisome, these new users have chosen to use AD very intensively. Per dollar of imports the new users have filed AD cases up to 15–20 times more frequently than the traditional AD users such as the United States and European Union (EU). Section 3 discusses the rationales for modern AD. I will explain that, despite the rhetoric often bandied about, AD statutes no longer have anything to do with predation or even economically harmful dumping.1 The predatory intent provision included in the earliest versions of the law was expunged more than 75 years ago. Ironically, one of the most basic lessons that one must learn is that modern AD has nothing to do with what microeconomics says is harmful pricing behaviour. AD is not about restraining an economically harmful dumping. It is just a clever form of protectionism. I conclude with some thoughts on whether these trends should be viewed hopefully or bleakly.

2. RECENT TRENDS IN AD USAGE

In this section I will review and discuss trends in AD use. Let me mention at the outset that quality of data regarding AD activity varies considerably across time and countries....

References: Anderson, J. E. (1992), ‘Domino Dumping I: Competitive Exporters’, American Economic Review, 82, 1, 65–83. Blonigen, B. A. (2003), ‘Evolving Discretionary Practices of US Antidumping Activity’, NBER Working Paper No. 9625. Blonigen, B. A. and C. P. Bown (2003), ‘Antidumping and Retaliation Threats’, Journal of International Economics, 60, 2, 249–73. Blustein, P. (2003), ‘When the US Thinks Goods Were “Dumped”, He Steps Up’, Washington Post (13 July), F01. Finger, J. M. (ed.) (1991), Antidumping: How It Works and Who Gets Hurt (Ann Arbor, MI: University of Michigan Press).
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Finger, J. M., F. Ng and S. Wangchuk (2002), ‘Antidumping as Safeguard Policy’, in R. M. Stern (ed.), Issues and Options for US-Japan Trade Policies (Ann Arbor, MI: University of Michigan Press). Lindsey, B. (1999), ‘The US Antidumping Law: Rhetoric versus Reality’, CATO Institute Centre for Trade Policy Studies Working Paper No. 7. Mastel, G. (1998), Antidumping Laws and the US Economy (Armonk, NY: M. E. Sharpe). Miranda, J., R. A. Torres and M. Ruiz (1998), ‘The International Use of Antidumping: 1987–1997’, Journal of World Trade, 32, 5, 5–71. Murray, T. (1991), ‘The Administration of the Antidumping Duty Law by the Department of Commerce’, in R. Boltuck and R. E. Litan (eds.), Down in the Dumps (Washington, DC: Brookings Institution). Prusa, T. J. (1992), ‘Why Are So Many Antidumping Petitions Withdrawn?’, Journal of International Economics, 33, 1–2, 1–20. Prusa, T. J. (2000), ‘On the Spread and Impact of Antidumping’, Canadian Journal of Economics, 34, 3, 591–611. Prusa, T. J. and S. Skeath (2002), ‘The Economic and Strategic Motives for Antidumping Filings’, Weltwirtschaftliches Archiv, 138, 3, 389–413. Shin, H. J. (1998), ‘Possible Instances of Predatory Pricing in Recent US Antidumping Cases’, in R. Z. Lawrence (ed.), Brookings Trade Forum 1998 (Washington, DC: Brookings Institution), 81–97. Zanardi, M. (2004), ‘Antidumping: What are the Numbers to Discuss at Doha?’, The World Economy, 27, 3, 403–33.
© Blackwell Publishing Ltd 2005
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