Effects of Dumping vs. Anti-dumping Measures: The US Trade Remedy Laws Applied to Wheat Imports from Canada

Abstract

Empirical estimation of the effects of dumping (and/or subsidization) usually has been assessed by estimating it after the imposition of an anti-dumping duty (and/or countervailing duty) order. This article examines, theoretically and empirically, the difference between the economic effects of dumping and anti-dumping measures, using US trade remedy law against hard red spring (HRS) wheat imports from Canada. An econometric model is developed and used to estimate the effects of the decline in HRS wheat imports from Canada after the imposition of anti-dumping/countervailing duties by US authorities. This study found that the anti-dumping/countervailing duties on Canadian HRS wheat imports resulted in an increase in HRS wheat price by $0.14/bushel. Although, in theory, the economic effects of dumping are seemingly identical to those of an anti-dumping measure, they are not equal in practice. In fact, the volume of dumped imports entering the US market on the strength of dumping and the volume of dumped imports driven from the US market after the imposition of an anti-dumping measure are not identical. Implementation of the trade remedy laws is certainly not designed to equate, scientifically, the two effects.