U.S. antidumping administrative reviews

The U.S. currently levies over 250 antidumping duties, and many of these duties fluctuate as a result of administrative reviews. Administrative reviews occur when antidumping duties are recalculated for the purposes of adjustment or revocation. This paper examines how administrative reviews influence U.S. antidumping duties. The paper also analyzes the forces that give rise to administrative reviews as well as the factors that produce changes in antidumping duties.     

A Note on the Incidence and Possible Cost of “Critical Circumstances” Penalties in U.S. Antidumping Enforcement

This article examines the incidence and possible cost of “Critical Circumstances” penalties in U.S. antidumping enforcement. Critical Circumstances penalties are surprisingly common. Of the 297 foreign firms that were assessed antidumping duties greater than 25% during the period 1980–1995, 89 (or 30%) were also assessed a Critical Circumstances penalty. The volume of imports affected by these Critical Circumstances penalties was approximately $991 million over the 15 year period (or about $66 million per year). The average level of the Critical Circumstances penalties was about 79% of the value of the relevant commerce, assessed for a period of up to 90 days, or as much as $13 million per year. The economic cost to the United States from Critical Circumstances penalties comes largely from the reduction in export levels (increase in prices) that foreign firms may make in the expectation that a Critical Circumstances penalty may be assessed. The article presents evidence that foreign firms have restricted their exports to the United States to avoid or minimize Critical Circumstances penalties, and discusses a simple model that may illustrate how foreign firms react to the possibility of such penalties.     

Stock market data and trade policy: dumping and the semiconductor industry

This article uses stock market data to examine the effects of cost-based dumping and the subsequent trade agreements between the United States and Japan on U.S. semiconductor firms. Our empirical results show that the initial indication of dumping by Japanese semiconductor firms had a significant negative impact on stock prices of U.S. firms. On the other hand, the subsequent market-sharing trade agreement, under which Japan agreed to prevent the dumping of Japan-manufactured chips in the United States and the United States agreed to suspend the application of antidumping duties, had a positive impact on the stock prices of U.S. semiconductor firms. Our findings support the neoclassical trade theory that the imposition of import relief leads to a wealth transfer to producers.     

上海东源公司就蜂蜜反倾销复审中价格计算问题告美国商务部案评析

美国对华蜂蜜反倾销已历时14年多。上海东源公司等不服美国商务部在第二次行政复审中对替代国价格的认定,在美国国际贸易法院提起诉讼。本文在介绍基本案情的基础上,对美国国际贸易法院的判决做了归纳,并对本案涉及的主要法律问题进行了评论。     

Antidumping, signaling and cheap talk

In the United States, there is evidence that domestic non-filing firms do not always support dumping/countervailing duty investigations. Absent other factors, domestic firms have an unambiguous incentive to support petitions filed by other domestic producers. We argue that in cases where the non-complainant firm is not a significant importer or exporter, the most plausible explanation is that non-support acts as a costly signal of private information. Extending the model to allow firms to engage in cheap talk, such signaling can take place even in the absence of an investigation. This result provides an explanation for the puzzling observation that fewer antidumping investigations are filed than one would expect.     

Strategic Behaviour under European Antidumping Duties

In this paper we develop a dynamic two-period model of imperfect competition to analyse the effects of European antidumping duties on firm behaviour and domestic welfare. Our model is one of the first to complement the European empirical literature on antidumping policy and can usefully be compared with papers dealing with the effects of US antidumping policy. We arrive at three important conclusions: (a) the strategic behaviour of European firms under European antidumping rules may run in the opposite direction compared to the incentives for US firms provided under the US antidumping rules; (b) US antidumping rules perform better than European rules in terms of domestic welfare and in terms of protecting domestic value added and employment; (c) the Strategic Trade Policy argument for protection need not apply for antidumping duties because the level of protection is endogenously determined by the firms involved.     

The First Review of European Union Antidumping Reviews

The literature on antidumping (AD) has documented various aspects of this protectionist tool. However, a peculiar feature of AD has not received much attention: these measures are endogenous to the behaviour of the exporting firms, which can adjust the dumping margin by changing their export price and ask the authority to amend the AD measures accordingly. The objective of this paper is to fill part of this gap in the literature by analysing the AD reviews conducted by the European Union for affirmative petitions initiated in 1980–2009. To this end, a novel data set of all such reviews has been assembled. Summary statistics reveal that more than a third of all petitions concluded with the imposition of AD measures are reviewed at least once before their expiration, and most reviews lead to lower AD duties (although, almost 20 per cent of the firms investigated through interim reviews see their duties increase). There are significant differences in the outcome of the reviews depending on the party requesting them (i.e. reviews lodged by European producers are less likely to lead to lower duties). These conclusions are confirmed by the econometric analysis, which also shows that Chinese firms see their duties reduced significantly less than those of firms from other countries.     

Multiproduct firms and antidumping duties: Evidence from India

ABSTRACT

With the growing availability of high-quality higher-dimension data in international trade, many new stylized facts have also emerged. One such stylized fact is that multiproduct firms play a significant role in international trade. In this paper, we investigate the effect of US antidumping duties on the exports of Indian multiproduct firms. In particular, we study whether US antidumping duties lead the Indian exporter to alter their product-scope to third country markets (aka to trade partners other than the US). Using a unique transaction-level data from India, we find that firms affected by US antidumping duties increased the number of products exported to other destinations by about 0.7 products, on average. This translates to a substantial 40% increase in the product-scope of these firms because a typical Indian exporting firm exported an average of 1.8 products to a given destination in our sample. We also find that firms whose products spanned multiple sectors drove most of this increase. However, we do not find any difference in the product-scope response of firms producing differentiated vs. those producing homogenous products. We find our results to be robust across various specification and sample size changes.     

Unpacking Open Innovation: Absorptive Capacity,Exploratory and Exploitative Openness,and the Growth of Entrepreneurial Biopharmaceutical Firms

In this article, we explore the relationship between two key aspects of open innovation in small firms—absorptive capacity (ACAP) and external relationships—and their effects on growth in the U.S. and European biopharmaceutical sectors. Results from an international sample of 349 biopharmaceutical firms surveyed in the United States, United Kingdom, France, and Germany suggest that realized ACAP plays an important role in determining firms’ growth. In terms of the interaction between firms’ ACAP and external relationships, we find that engagement with exploratory relationships depends strongly on the continuity of R&D, while participation in exploitative relationships is more conditional on firms’ realized ACAP.     

Corporate Lobbying in Antidumping Cases: Looking into the Continued Dumping and Subsidy Offset Act

Is protection for sale? In this research, we examine the effect of corporate lobbying on the disbursement of proceeds of the recent antidumping petitions under the Continued Dumping and Subsidy Offset Act, the so-called Byrd amendment. With the use of novel U.S. Customs Service data on the disbursements of the antidumping duties to the injured firms, we find that the petitioning firms that spend more on lobbying gain larger proceeds. We conclude that firms that lobby are the ones that get protection, not necessarily the healthy ones.     

Recent changes in non-tariff measure use by industrial nations

Trade coverage ratios are calculated to assess the 1989 incidence of non-tariff measures (NTMs) on imports of major industrial nations. Recent trends in NTM use are evaluated. Industrial nations are found to make heavy use of NTMs to regulate trade flows. Overall, about 24% of all imports are found to be covered by one or more NTM. Considerable changes in NTM use have occurred over the 1986-1989 period. The major factor responsible for this trend is the increased reliance placed by the United States on the use of antidumping/countervailing duty actions and voluntary export restraints.     

Exemption under the Fair Labor Standards Act: The cost of misclassifying employees

The Fair Labor Standards Act of 1938 created two classes of employees—those who are paid for each hour of their labor and those who are given a salary due to the administrative, professional, or executive nature of their responsibilities. The FLSA created exemptions from the hourly wage laws for executive and administrative employees who are paid a salary. Therefore, employers must classify each employee correctly or risk substantial damage payments for lost overtime hours. The law contains a two-fold test for exempting positions from the law's overtime provisions. The first prong of the test is that the position pays a regular salary that essentially does not vary according to either the quality or quantity of work performed. The second prong involves the position's primary duties as being executive or administrative. (The article does not discuss the professional exemption.) The executive-duties test is that the position directs the equivalent of two or more full-time employees in managing a recognized department or subdivision of an enterprise. To meet the administrative test, the position's primary duty must involve the exercise of discretion or independent judgment relating to management policies or conduct of the business.     

Has the Byrd Amendment Affected US Imports?

The Continued Dumping and Subsidy Offset Act (CDSOA), also known as the Byrd Amendment, allows the US government to distribute revenues from antidumping duties to domestic firms alleging harm. Prior to the amendment these revenues were not distributed to firms. In this article, we formally test the hypothesis that the Byrd Amendment effectively provides double protection to US firms to the extent that it further restricts US imports, as argued by the EU and 11 other US trading partners. Using a rich panel of 362 US manufacturing industries for the period 1998 to 2003, we find that whether or not the Byrd Amendment restricted US imports depends crucially on the level of competitiveness in the import‐competing industry. Specifically, we find that the Byrd Amendment served to restrict imports only in industries where competition is relatively weak, while the amendment is associated with an increase in imports in more competitive industries.     

Plant-level responses to antidumping duties: Evidence from U.S. manufacturers

This paper describes the effects of a temporary increase in tariffs on the performance and behavior of U.S. manufacturers. Using a dataset that includes the full population of U.S. manufacturing plants, I show that an apparent positive correlation between antidumping duties and traditional revenue productivity is likely misleading. For the subset of plants reporting quantity-based output data, increases in prices and markups artificially inflate the effect of antidumping duties on revenue productivity, while physical productivity actually falls. Moreover, antidumping duties allow low-productivity plants to continue producing protected products, slowing the reallocation of resources from less productive to more productive uses.     

Import Demand Elasticity and Exporter Response to Anti-Dumping Duties

ABSTRACT

This article investigates exporting firms’ behavior following the imposition of anti-dumping (AD) duties. AD duties tend to increase the prices of imported goods via a mechanism different from any other trade barrier because the AD duty size is endogenously dependent on import prices. Our model accounts for this feature and demonstrates that exporters are more likely to adjust their price upward when they face a less elastic demand. The theoretical predictions are supported empirically by relating product-level U.S. import demand elasticities and exporting firms’ reactions to duties inferred from a dataset on U.S. AD investigations from 1980 to 1995.     

A Survey of Ethics Officers in Large Organizations

Corporations in the United States have been starting ethics programs for a variety of reasons both active and passive. Ethics officers are being charged with improving both company image and the level of ethical decision-making by employees. Thirty ethics officers from Fortune 500 firms were surveyed to develop a database of their duties and the companies' commitment to ethical standards. The results suggest much is being done, both in the diversity of responses and the similarities of commitment and duties.     

US Antidumping Law and Competition in International Trade

It is usual to argue that the US antidumping code and legal practice have become a substitute for tariffs now severely limited by GATT and, somewhat like these displaced tariffs, they are intended to limit the extent of price competition by foreign sellers. However, there is one set of conditions under which the regulations and duties, and the accompanying increase in market price they bring about, increases domestic producer surplus more than they decrease consumer surplus and therefore increase domestic welfare. As is shown, these conditions require antidumping duties to exclude foreign manufacturers from the domestic market in a specific inverse relationship to the prevailing market price. While the duties imposed with an antidumping violation implicitly set out an exclusion rate for foreign manufacturers, there is little in the US code or legal practice which suggests that the duties and exclusion rates are established with this specific rule in mind.     

Regulatory Reform and the U.S. Manufacturing Sector

The Bush administration, through the Office of Management and Budget, Office of Information and Regulatory Affairs (OMB/OIRA), has shown renewed interest in regulatory reform as an important public issue, especially as it pertains to the nation’s manufacturing sector. On March 9, 2005, OMB/OIRA announced that Federal agencies will be taking practical steps of an administrative nature to reduce the cost burden on manufacturing firms operating in the United States by acting on 76 suggested reforms of federal regulations suggested by the public. Recommended actions range from gathering and reporting additional information to issuing modernized regulations, with reforms to be implemented through rulemaking procedures that include an opportunity for public participation. JEL Classification L510     

American health politics, 1970 to the present: some comments

This article reviews the attempts of the 1970s and 1980s to rationalize health care provision in the United States. It critically discusses the contorted debate between competition and regulation as a means of controlling health care costs. The second part of the article takes up Eli Ginzberg's contentions about American health care. We agree that the United States has not been able to control medical inflation because it lacks the necessary condition of concentrated finance. But we present evidence from public opinion polls in the 1970s and the 1980s that challenges Professor Ginzberg's contention that "there is no evidence that the American people want to change [their] system" of medical care.     

Trade deflection and trade depression

This is the first paper to empirically examine whether a country's use of an import restricting trade policy distorts a foreign country's exports to third markets. We first develop a theoretical model of worldwide trade in which the imposition of antidumping and safeguard tariffs, or “trade remedies,” by one country causes significant distortions in world trade flows. We then empirically test this model by investigating the effect of the United States' use of such import restrictions on Japanese exports of roughly 4800 products into 37 countries between 1992 and 2001. Our estimation yields evidence that US restrictions both deflect and depress Japanese export flows to third countries. Imposition of a US antidumping measure against Japan deflects trade, as the average antidumping duty on Japanese exports leads to a 5-7% increase in Japanese exports of the same product to the average third country market. The imposition of a US antidumping measure against a third country depresses trade, as the average US duty imposed on a third country leads to a 5-19% decrease in Japanese exports of that same product to the average third country's market. We also document the substantial variation in trade deflection and trade depression across different importing countries and exported products.