The trade effects of antidumping duties: Evidence from the 2004 EU enlargement

Abstract

This paper exploits the 2004 EU enlargement as a natural experiment to estimate the effects of antidumping (AD) duties on import prices and quantities. The automatic extension of EU AD policy to new member states following their accession is exogenous to new members' trade shocks. Using this source of variation, the paper shows that, on average, AD duties raise producer prices of targeted exporters. However, import prices from countries with non-market economy status (NMES) - notably China - remain unchanged, while quantities fall more strongly. This is in line with expectations, as the EU applies special rules to NMES countries. The trade dampening effects of AD duties persist over time. Moreover, the duties appear to induce exporters from non-targeted countries to increase their prices.