Did Anti-dumping Duties Really Restrict Import?: Empirical Evidence from the US, the EU, China, and India

Abstract

(ProQuest: ... denotes formulae omitted.)I.INTRODUCTIONSince global economic crisis of 2008, international trade communities have expressed concern about rise of protectionism, as protectionist measures such as import restriction and tariff increase have been historically prevalent in period of an economic slowdown.1 Moreover, US President Donald Trump maintained a protectionist stance throughout his campaign. Specifically, he claimed that foreign countries were driving US products out of domestic market by dumping underpriced products into US market. He announced that he would use powers of his presidency to increase tariff rates and accused China and Mexico of unfair trade practices.Previous research has focused on effects that anti-dumping duties have on import. Vandenbussche and Zanardi (2010) studied effects of anti-dumping duties on bilateral trade from period of 1980 to 2000, using gravity model. They found that anti-dumping duties have a chilling effect on total import volume but that effect varies by industry. Besedes and Prusa (2016) estimated import reduction effects of anti-dumping duties using a random effects probit model. Their research indicated that effects of US anti-dumping duties on trade are greater during stage of investigation and preliminary decision than after actually reaching a final decision. They also found that it is difficult for target countries to recover previous level of trade after termination of an anti-dumping duty. Bellora and Jean (2016) investigated possible effects of anti-dumping cases on import volume and unit value in event that European Union granted market economy status (MES) to China. The study used European trade and tariff data from 1988 to 2015, indicating that European import from China would increase by 3.9% to 5.3%.Lee (2009) compared import reduction effects against target countries and import diversion effects on third countries, showing that anti-dumping duties have import restricting effects. The study applied a random-effect GLS regression and a dynamic panel data methodology based on Helpman, Melitz, and Rubinstein (2008) model to US data from 1990 to 1996. Park (2009) studies effect of anti-dumping duties on import using Chinese data from 2002 to 2004, employing Generalized Method of Moments (GMM) estimator. The results show that anti-dumping protection has significant trade depressing and trade diversion effects.Most previous studies focus on only import restriction effect of anti-dumping measures, dealing with a single country (Besedes and Prusa, 2016; Bellora and Jean, 2016; Lee, 2009; Park, 2009; Prusa, 1996; Blonigen, 2006). They fail to provide comparable results on economic effects of an anti-dumping duty. In addition, they do not deal with recent trends, such as how investigations of anti-dumping duties have become prevalent in both developed and developing countries. Considering ever-increasing political demands in economic sector for an anti-dumping duty in major economies, we need to investigate whether this would be a protectionist measure or trade remedy.In this respect, this paper will provide answers to following open questions. First, is argument that anti-dumping duties exert a dominant trade restriction effect valid for all of major countries? This paper investigates effects of anti-dumping measures on imports applying a two-stage methodology to data on US, EU, China and India.Second, are anti-dumping duties terminated in case that the injury would not be likely to continue or recur if duty were removed?2 This paper analyzes determinants of termination of an anti-dumping duty using Cox proportional hazards model, thereby reviewing whether it is operated as a trade remedy measure within a certain period of time. This is first study, to best of our knowledge, to investigate determinants of termination of an anti-dumping duty. …