Analysis of Anti-dumping Use in Free Trade Agreements

Abstract

Proliferating free trade agreements (FTAs) in recent years may have conflicting effects on anti-dumping (AD) uses among PTA parties. On the one hand, an FTA may increase a country's AD activities to protect its domestic industries from the increased import flows from other parties. On the other hand, an FTA supposedly helps reduce the use of AD measures to accomplish the purpose of free trade. Which effects prevail can shed important lights on the question of whether an FTA can be a stumbling block or a building block.This article examines the effects of FTAs on AD activities based on comprehensive empirical analysis. Using longitudinal data of major AD user countries from 1995 to 2009, we found that there is clearly an inverse relationship between an FTA and AD activities. This finding represents the user's tendency to trigger less AD filings against FTA membership, regardless effacing more imports from FTA partners. This article also captured dynamic FTA effects based on a series of distribution of time dummies. The estimation results from the dynamic model show that the FTA enactment year clearly has significant effect, suggesting substantial reduction of AD investigations in that year.