Protectionist Measures in the Agriculture Sectors: Perishability and Competition

Abstract

In this paper we compare the use of antidumping (AD) measures in the agriculture sector by Canada and the United States, the two major users of antidumping procedures.1 We consider both the direct and indirect effects of the AD measure, and consider what factors make an AD measure more or less successful at impeding trade and when it is more likely to cause trade diversion. Specifically, we ask when the imposition of an antidumping duty restricts imports of the targeted commodity and when is there a deflection in the supply of imports from countries named in the petition to countries not named in the antidumping petition? We compare these results for that of the US and draw conclusions about the determinants of such differences, like the exchange rate, GDP and distance to partner countries. We use a modified version of the gravity model, as used in the earlier literature (Prusa (2001)) for our analysis. We find that affirmative AD cases caused trade diversion from non-named countries for agricultural products in general, but that trade diversion was particularly strong for perishable products. We also find that the more concentrated the imports, the more restrictive the AD duties.