Advocates of antidumping (AD) laws downplay their effects by arguing that the trade ßows that are subject to AD are small and their distortions negligible. This paper is the Þrst to counter that notion by quantifying the worldwide effect of AD laws on aggregate trade ßows. The recent proliferation of AD laws across countries provides us with a natural experiment to estimate the trade effects of adopting versus using AD laws; differences in the intensity of use among countries with older AD laws allow us to investigate reputation effects. For this purpose, we estimate worldwide trade ßows using a gravity equation spanning 21 years (1980-2000) of annual observations. Our estimates conÞrm that AD effects are not small. Among other Þndings, new tough users have their aggregate imports depressed by 15.7 billion US$ a year (or 6.7%) as a result of the AD measures they have imposed. For a traditional user like the United States, current AD measures depress annual imports by almost 20 billion US$ on top of the cumulative negative effect of reputation. For some countries, the dampening effects of AD laws on trade ßows are found to nearly offset the gains from trade liberalization.
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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number
2006038.
Find related papers by JEL classification: F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
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