Why the Potential for Trade Diversion should Be Examined Prior to Considering Setting an Antidumping Duty Lower than the Dumping Margin

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This paper argues that, where the potential for trade diversion is significant, the protective effects of antidumping measures are heavily diluted, as in such circumstances imports can be sourced from non-subject countries at prices lower than the price of subject imports inclusive of an AD duty reflecting the full dumping margin. Therefore, investigating authorities in World Trade Organization (WTO) Members where the 'lesser duty rule' is part of domestic legislation should examine whether the potential for trade diversion is significant prior to considering setting an AD duty at a level lower than the dumping margin.