The Growing Problem of Antidumping Protection
12/12/2007 12:00
Author: Thomas J. Prusa
We examine trends in antidumping use with particular focus on the Asia-Pacific region, the traditional source for much of the rhetoric justifying AD protection. We show that AD is the world’s biggest trade impediment primarily because of its use by new users. Twenty years ago the top four users accounted for 98% of AD actions; nowadays these traditional AD users account for only about 40% of the disputes. Once we control for size, it becomes apparent that new users are filing at prodigious rates, five, ten, and even twenty times the rate as the traditional users. We find that the proliferation has increased the number of AD disputes but has not significantly affected the propensity for Asia-Pacific countries to be targeted by AD actions. Interestingly, while we see that traditional and new users both tend to target industries where they are losing comparative advantage since this pattern varies across countries, AD complaints differ across source countries. In other words, the pattern of AD use says as much about the filing country as it does about the target countries. Finally, we estimate that exchange rate appreciations stimulate AD activity both traditional and Asian AD users, but the impact is greater for traditional users. This suggests that the injury test is easier to satisfy among Asian AD users.
We examine trends in antidumping use with particular focus on the Asia-Pacific region, the traditional source for much of the rhetoric justifying AD protection. We show that AD is the world’s biggest trade impediment primarily because of its use by new users. Twenty years ago the top four users accounted for 98% of AD actions; nowadays these traditional AD users account for only about 40% of the disputes. Once we control for size, it becomes apparent that new users are filing at prodigious rates, five, ten, and even twenty times the rate as the traditional users. We find that the proliferation has increased the number of AD disputes but has not significantly affected the propensity for Asia-Pacific countries to be targeted by AD actions. Interestingly, while we see that traditional and new users both tend to target industries where they are losing comparative advantage since this pattern varies across countries, AD complaints differ across source countries. In other words, the pattern of AD use says as much about the filing country as it does about the target countries. Finally, we estimate that exchange rate appreciations stimulate AD activity both traditional and Asian AD users, but the impact is greater for traditional users. This suggests that the injury test is easier to satisfy among Asian AD users.
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