Anti‐dumping Protection in a Liberalising Country: Mexico's Anti‐dumping Policy and Practice

The use of anti‐dumping policy has been steadily growing in recent decades, and so has the theoretical and empirical literature on anti‐dumping. However, while developing countries as a whole have become at least as active as the ‘traditional’ anti‐dumping regimes (the USA, the EU, Canada and Australia), the literature is almost exclusively concerned with the latter group. This article gives an overview of anti‐dumping policy and practice in Mexico, one of the leading ‘new’ anti‐dumping regimes. It assesses how anti‐dumping has expanded since the country began liberalising trade in the mid‐1980s, and discusses how the policy has been applied in a protectionist way that is not dissimilar to policy practice in the traditional user countries.     

East Asia's Anti‐dumping Problem

East Asia accounts for a large and growing share of worldwide anti‐dumping (AD) activity. East Asian countries have long been the main targets of AD actions, accounting for about one‐third of all AD actions during the 1980s, more than 40 per cent of all AD actions during the 1990s, and almost 50 per cent of all AD actions in recent years. After controlling for factors that might influence filings such as the exchange rate and trade volume, it is found that East Asian countries are subject to about twice as many cases as either North American or Western European countries. Moreover, the trend in filings against East Asian countries is increasing, meaning that in recent years the propensity for countries to direct their AD filings against East Asian countries is growing. One concern is that the growing intensity of AD use against East Asia is driven by China‐PRC. Importantly, but a rising propensity is found even excluding China‐PRC.     

The Political Economy of United States’ Free Trade Arrangements

Far from being the leader, the US has been a ‘domino’ belatedly falling into line in the global rush toward bilateral and regional free trade arrangements. Often the initiative for negotiations has come from seemingly weaker trading partners. Once in the game, however, and aware of the asymmetries of market power and issue salience that enhance US bargaining leverage, the US has been aggressively pursuing a variety of commercial and diplomatic interests, both tactical and strategic, that include bolstering local democratic institutions and processes of economic reform, strengthening US security ties, accelerating region‐wide commercial liberalisation by allying with a regional leader, establishing new precedents to use as bench markers in future trade negotiations, and otherwise using free trade accords to advance its comprehensive global trade policy agenda. Bilateralism and regionalism have opened the door to an explicit introduction of political criteria, in contradiction to GATT/WTO apolitical universalism. While often reactive to the initiatives of other nations, the US has not been indiscriminate, deflecting the entreaties of suitors where US international political economy interests are not served.     

The Political Economy of Reforming the Anti‐dumping Laws

In the idealised economic world in which economists usually begin their theoretical analyses, the first‐best international policy for dealing with dumping is to eliminate the economic distortions that make dumping possible, e.g., tariffs, subsidies and monopoly power, and deal with relevant equity considerations through lump‐sum income redistribution. But this combination of policies generally is not politically feasible, and the use of second‐best policies is the only realistic option. Consequently, for academic economists seeking achievable AD reform, the most promising approach may be to work toward the elimination of the many current administrative practices that unfairly injure groups not directly involved in the petitioning process but accept that there can be practical circumstances where the equity concerns of petitioners trump overall efficiency objectives.     

The Rise of US Anti‐dumping Activity in Historical Perspective

Empirical studies of anti‐dumping activity focus almost exclusively on the period since 1980. This paper puts recent US anti‐dumping experience in historical context by studying the determinants of annual case filings over the past half century. The conventional view that few anti‐dumping cases existed prior to 1980 is not correct, although most did not result in the imposition of duties. The increased number of cases in recent decades largely reflects petitions that target multiple‐source countries; the number of imported products involved has actually fallen since the mid‐1980s. The annual number of anti‐dumping cases is influenced by the unemployment rate, the exchange rate, import penetration (closely related to the decline in average tariffs), and changes in the anti‐dumping law and its enforcement in the early 1980s.     

Anti‐dumping: A Growing Problem in International Trade

This paper discusses the issue of anti‐dumping (AD) proliferation. AD is used more frequently, by more countries, and against more products than ever in its history. I review AD filing patterns with an emphasis on the scope of countries and industries seeking protection. Recent trends suggest that the widespread embrace of AD protection makes the prospect for AD reform increasingly unlikely. AD is no longer being used solely by high‐income developed countries. It is increasingly being used by middle‐income and even lower‐income countries. 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 US and EU. The evolving set of AD users complicates AD negotiations. In the near term, strong opposition by the US and EU makes reform a highly unlikely outcome. In the longer run, rising use of AD against the US and EU could conceivably weaken their support for AD; yet, the same trends that might finally cause the US and EU to realise AD is a failed policy will likely make reform impossible.     

The Trade Effects of US Anti‐dumping Actions against China Post‐WTO Entry

Since China's entry into the WTO, US anti‐dumping (AD) actions against China have increased, particularly with respect to multiple petitions. Distinguishing between US single and multiple petitions, we examine the trade effects of US AD actions against China based on an unbalanced panel of quarterly trade data. The results show that a US single petition investigation greatly restrains US imports of the filed products from China but also causes more significant import diversion from non‐named countries. In the short run, a preliminary AD duty imposed on China via a US multiple petition not only restrains US imports of the filed products from China but also prevents trade diversion from non‐named countries. In the long run, a final AD duty on China resulting from a US multiple petition creates a larger destructive effect on China and causes US import diversion from non‐named countries. Thus, a final AD duty imposed on China following a US multiple petition not only harms China's exports but also fails to help the US achieve import substitution. Furthermore, we have been able to reveal the negative trade effect of a preliminary AD duty even in cases where the ultimate decision is not to impose a final duty.     

An Analysis of Factors Influencing the Anti‐dumping Behaviour in India

The use of anti‐dumping measures as a trade protection tool, has increased phenomenally during the last decade. One significant aspect of this new trend is the increasing involvement of developing countries. India is one such country which has emerged as a very frequent user of anti‐dumping measures, surpassing even the traditional users. It had initiated more than 300 anti‐dumping cases by the end of 2002–03. Many of these cases are against developing countries. Most of the cases are concentrated in narrow range product groups, like chemicals and petrochemicals, iron and steel, pharmaceuticals and textiles. This study examines India's experience with anti‐dumping measures. The main objective of the study is to identify the factors which might have influenced the anti‐dumping behaviour in India. Discussion of these factors shows that imports have increased considerably. This is particularly true for a number of developing countries facing dumping charges in India. At the same time, many of the domestic producers of the like products have performed poorly during the last decade. Such trends may instigate the import‐competing industries to seek anti‐dumping protection and may also influence the authority to provide that. However, the results of our statistical exercise show that, although imports and performance of the domestic industry might have influenced the initiation of anti‐dumping cases, these factors did not seem to significantly influence the final decision of the authority. The results rather indicated a tendency on the part of the authority to provide anti‐dumping protection to industries, which are characterised by a large number of firms.     

Anti‐dumping Reform: Time to Go Back to Basics

This paper traces and analyses both the legal and economic history of the US anti‐dumping regime, and sets forth the shortcomings of the current system, both in regards to efficiency and equity. It then presents and explains a series of proposals for reform of the system, ranging from abolition of anti‐dumping laws and regulations and their replacement with competition laws, down to less drastic but specific changes within the existing system to render it less onerous to consumers and exporters. The paper finally details the case for substituting safeguards actions for anti‐dumping actions.     

Anti‐dumping Duty and Firm Heterogeneity: Evidence from Korea

This study examines the imposition of anti‐dumping (AD) duties on imported products in Korea. We use panel data for Korean firms between 2000 and 2012 and estimate the firm‐level productivity of import‐competing firms before and after AD imposition. Using a difference‐in‐difference framework, we compare firm productivity changes in a treatment group that receives AD protection to a control group that does not. In contrast to recent findings on the effects of AD measures, we find that the average protected firms experience productivity loss during the AD protection period. Examining the changes in external market condition and internal resource allocation during the protection period, such loss appears to be more evident inside highly concentrated import‐competing sectors. Further, we find that protected firms are more likely to reallocate their resources abroad via FDI at the expense of domestic production and investment once they receive temporary protection.     

Anti‐dumping at 100 Years and Counting: A Canadian Perspective

The world's first anti‐dumping measure was introduced by Canada as a ‘special duty’ that could be levied administratively rather than being enacted. This paper describes the features of this first measure in light of subsequent evolution of anti‐dumping practice and sets it in its historical context – an era that was a high season of globalisation but also an era marked by an awakening of economic nationalism in newly industrialising countries, and by growing angst over the power of large corporations that were emerging to exploit the economies of scale allowed by mass production, as evidenced by the concurrent evolution of anti‐combines legislation. Anti‐dumping's early integration into economic theory as an international counterpart of domestic competition policy has received some official ratification in international treaties, and governments see it as a legitimate policy, albeit one in need of international disciplines. However, analysis of the pattern of its use reveals it to be an instrument of political economy, as a convenient alternative to the WTO safeguard option. The paper explores contextual reasons why today, in another high season of globalisation, marked by concerns over corporate globalism that evoke those of the earlier era, anti‐dumping actions are proliferating where they did not then.     

Anti‐dumping duty circumvention through trade rerouting: Evidence from Chinese exporters

We study the evasion of US anti‐dumping duties by some Chinese exporters through trade rerouting via third countries or regions. Using detailed monthly trade data reported by China and the US Customs during the period of 2002–06, we find that US anti‐dumping actions against China lead to a stronger positive correlation between US imports from third countries and Chinese exports to the same third countries. Such a positive correlation is more pronounced for the products subject to anti‐dumping duties (treatment groups) than similar products not subject to these duties (control groups). The evidence is stronger for less‐differentiated products whose certificates of origins are easier to be modified and is stronger for third countries where the rerouting cost is low. These findings are consistent with a trade rerouting story, rather than a simple story of trade diversion (i.e., increase in some third countries' imports from China) and trade deflection (i.e., increase in some third‐country exports to the US). We also rule out other alternative stories, consider prior production in third countries and concurrent anti‐dumping actions against China or third countries, pay a particular attention to the many zero trade flows in the monthly level data and check the robustness to using an alternative control group and quarterly data, etc.     

Accounting for Stylised Facts about Recent Anti‐dumping: Retaliation and Innovation

Recent work has found certain stylised facts about anti‐dumping (AD) actions. (i) AD actions are mostly between industrial and developing countries; (ii) developing countries use AD to retaliate against industrial countries; and (iii) AD is concentrated in R&D‐intensive industries. This study develops an analytical framework that can account for these empirical findings. The model suggests that market expansions and/or improvement in R&D capability in the South are essential in avoiding AD wars with the North. Interestingly, stricter enforcement of intellectual property rights in the South has little effect on stopping AD wars between the North and the South.     

A Centennial of Anti‐dumping Legislation and Implementation: Introduction and Overview

A century has passed since the Government of Canada adopted the first recorded anti‐dumping law in 1904. The Canadian legislation was soon followed by similar legislation in most of the major trading nations in the industrialised world prior to and after World War I. Anti‐dumping provisions were later incorporated into the General Agreement on Tariffs and Trade (GATT) following World War II. Nowadays, virtually all of the industrialised and developing countries in the world economy have adopted anti‐dumping legislation. In view of the long and increasingly widespread use of anti‐dumping measures, we marked the centennial of Canada's 1904 legislation with a symposium at the University of Michigan on 12 March, 2004. The symposium papers document the experiences with anti‐dumping and then ask whether and how anti‐dumping can be reformed. Although we all would probably agree that the best solution would be to retract all anti‐dumping legislation, this is unlikely to happen in the foreseeable future. Anti‐dumping laws serve a variety of purposes, and powerful political forces stand in the way of eliminating these laws. Anti‐dumping provides a stronger and more focused means of safeguards protection against surges of imports than GATT‐legal safeguards laws permit. Anti‐dumping also formalises a meaning for ‘unfair trade’ that, though essentially meaningless from an economic standpoint, strikes a chord in public perception. And finally, in spite of its appearance of being constrained by objective administrative rules, anti‐dumping in practice is a potent political tool that governments are able to manipulate in order to satisfy powerful constituents. With all this going for it, anti‐dumping is unlikely ever to be relinquished as an economic policy tool by governments.     

The Politicisation of EC Anti‐dumping Policy: Member States,Their Votes and the European Commission

This paper examines one political‐economy aspect of the European Communities’ (EC) anti‐dumping policy that has tended to be overlooked in prior studies; namely, the role that member states play in deciding whether to impose definitive duties on imports that have been found to be dumped and that are deemed to have injured a European industry. We find that, in the late 1990s, numerous disagreements between member states occurred over the merits of imposing anti‐dumping duties. These disagreements may well have been partly responsible for the strong decline in the number of European anti‐dumping investigations initiated after 1999.     

Canada's Anti‐dumping and Safeguard Policies: Overt and Subtle Forms of Discrimination

Like many countries in the international trading system, Canada repeatedly faces political pressure from industries seeking protection from import competition. I examine Canadian policymakers’ response to this pressure within the economic environment created by its participation in discriminatory trade agreements such as the North American Free Trade Agreement (NAFTA). In particular, I exploit new sources of data on Canada's use of potentially WTO‐consistent import‐restricting policies such as anti‐dumping, global safeguards and a China‐specific safeguard. I illustrate subtle ways in which Canadian policymakers may be structuring the application of such policies so as to reinforce the discrimination inherent in Canada's external trade policy because of the preferences granted to the United States and Mexico through NAFTA.     

The EU Anti‐dumping Policy Towards Russia and China: Product Quality and the Choice of an Analogue Country

This paper uses the theory of international trade in vertically differentiated products in order to assess whether the EU has calculated disproportionately high dumping margins in its anti‐dumping policy towards the two non‐market economies (NMEs) Russia and China since 1992. Specifically, the investigation concerns cases in which the level of economic development in and the quality of the products from the chosen analogue country are higher than in the two NMEs. The conclusion drawn here is that, even when the EU chooses analogue countries at a higher level of economic development than Russia and China, the differences in product quality and in the levels of economic development between the dumpers and the analogue countries provide no systematic explanation of the size of dumping margins.     

Trade Policy Flexibilities and Turkey: Tariffs,Anti‐dumping,Safeguards and WTO Dispute Settlement

The commitment to lower import tariffs and to maintain tariffs at low levels entails political‐economic trade‐offs. Empirical work examining the relationship between such commitments and the ‘flexibilities’ that policymakers exercise to get around them is still relatively nascent, especially for emerging economies. This paper provides a rich, empirically based assessment of ways that Turkey exercised trade policy flexibilities during the global economic crisis of 2008–11. First, and despite multilateral and customs union commitments that might limit changes to its applied tariffs, Turkey exercised flexibilities during 2008–11 by making changes to both its applied MFN and preferential tariffs that could affect nearly 9 per cent of its manufacturing imports. Second, Turkey's cumulative application of temporary trade barrier (TTB) policies – that is, anti‐dumping, safeguards and countervailing duties – is estimated to impact an additional 4–6 per cent of Turkey's manufacturing imports by 2011. Other surprising results include Turkey's lengthy extensions to the duration of previously imposed anti‐dumping and safeguards beyond expected removal dates, conversion of product coverage from one TTB policy to another, extensive coverage of upstream and downstream segments of important industries and potential deepening of discriminatory preferences already inherent in existing preferential trade agreements.     

Country‐Specific Profiles of Performance Management in China,Germany, and the United States—An Empirical Test

The vast majority of the literature on performance management (PM) chooses a contextual perspective, focusing on the cross‐country comparison of single elements of the PM system. Simultaneously, a conceptual basis and an encompassing comprehension of country‐specific peculiarities are lacking. Based on a suggested conceptualization of the elements of PM (criteria, actors, methods, purposes, feedback) and hypotheses developed from an encompassing literature review, the authors present empirical findings from a quantitative study including 167 managers from multinational enterprise (MNE) subsidiaries in three culturally and institutionally diverse major economies (Germany, United States, and China). Contrary to what the literature suggests about the local peculiarities of PM, the results of the present study show significant country‐specific differences in only 6 out of 16 investigated PM features. Furthermore, the analytical categorization of “Western” countries versus China cannot be empirically confirmed. In contrast, more similarities between China and Germany than between Germany and the United States are identified. © 2014 Wiley Periodicals, Inc.     

Trade Diversion as Firm Adjustment to Trade Policy: Evidence from EU Anti‐dumping Duties on Vietnamese Footwear

This paper evaluates the impact of the 2006 European Union anti‐dumping (AD) action on Vietnamese footwear in three markets: imports to the EU, footwear producers in Vietnam, and the trade diversionary adjustment of Vietnamese firms in the US market. We find that the AD action reduced Vietnamese imports to the EU by as much as 65 per cent. Given that the EU makes up almost two‐thirds of Vietnam's footwear exports and footwear is among the top four export industries for Vietnam, this reduction is economically significant. Consistent with predictions of our model, we find evidence of trade diversion by Vietnamese producers from the EU to the US market. Our difference‐in‐difference estimates of the AD actions on the value of Vietnamese footwear imports to the United States ranged from 69 to 71 per cent over the period 2004–07 and 69 to 72 per cent in terms of quantity. These results highlight the spillover effects of trade policy in third markets when firms adjust to trade barriers. Our results are robust to triple‐difference specifications where we adjust for trend differences and a series of placebo specifications.