Antidumping Laws Should Be Consigned to the History Books

Abstract

Antidumping laws have existed in some form since the early twentieth century. Ostensibly aimed at protecting domestic producers from unfair trade practices, they have frequently been used as weapons of protectionism even when dumping has not occurred. When this happens, some special interest group gains at the expense of the general public. Studies have found that antidumping laws result in a negative-sum game, since the losses exceed the gains, an outcome that violates utilitarian ethical principles. Antidumping laws also violate property and contract rights, since they prevent consenting adults from trading the property they have for the property they want. This paper begins with a review of the theory and practice of antidumping laws, then proceeds to apply ethical principles to determine whether individuals who launch antidumping investigations are acting ethically and concludes that President Barack Obama “needs to be bold on trade” by starting out with correcting the popular view that “dumping” is bad and those who dump should be penalized. Frederic Bastiat pointed out the fallacy of this view in 1845, yet the view is not only still with many American politicians but widely believed to be true among U.S. domestic manufacturers. President Obama should proclaim the following: In a free enterprise economic system, domestic producers have no inherent claim on the funds of consumers. The only ethical way of obtaining consumer funds is through voluntary trade. Using the force of government to obtain the funds (by prohibiting foreign suppliers from competing) puts domestic producers in the role of the aggressor, and in fact makes consumers the real victims. That is exactly what happens when a domestic producer appeals to the government to request an anti-dumping investigation against some foreign producer that is merely taking away business. Therefore, all anti-dumping laws and policies should be abrogated to promote freer trade. A bibliography containing links to more than 100 trade articles is also included.