Consequence of sequential trade interventions: Evidence from the U.S. coated paper products

Abstract

Up to 40% of the total consumption of coated paper products in the United States has been met by imports in recent years. To protect domestic industry, two sequential antidumping and countervailing investigations against several major supplying countries (e.g., China) were conducted in 2006 and 2009. In this study, the effectiveness of these trade interventions is evaluated with the almost ideal demand system and cointegration techniques. Three types of trade effects are found through the analysis: trade investigation effect during the 15-month investigation process, trade depression effect on targeted countries subject to duty collection, and positive trade diversion effect on non-targeted suppliers. Imports from China and Indonesia have been suppressed since the duties were levied in 2010. However, other suppliers (i.e., Korea and Germany) have filled the market gap and gained a larger market share over time. The findings reveal that market competition in a specific sector has become more complicated within the increasingly globalized world economy, and sequential trade interventions can generate unpredictable results.