The Effectiveness of the Canadian Antidumping Regime

Abstract

Canada has the oldest antidumping (AD) regime in the world and has to this day been one of the heavier users of the measure. It is an important trade policy that affects a relatively large proportion of Canadian imports, and it requires a better understanding of its use and its effects on trade. In 2003, there were 92 measures in place affecting a sizable part of total Canadian imports (1,231 million dollars). The obvious question is whether imposing antidumping duties actually protects the domestic industry. We look at the trade effects of antidumping policy in the manufacturing industry in Canada. We also look at the effect of an antidumping action on the level of imports from the non-named countries, to analyze the extent of trade diversion. It is possible that imports might be diverted away from the alleged source country to the non-alleged countries rendering antidumping law ineffective in benefiting the domestic industry. We use AD data for the years 1990-2000, and import data disaggregated at the 10 digit HS level and we find that overall, Canadian antidumping is an e±cient tool for restricting imports from the countries that are named or alleged to be dumping.