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Trade Liberalization and Antidumping: Is There a Substitution Effect?

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  • Michael Owen Moore

    ()
    (Department of Economics/Institute for International Economic Policy, George Washington University)

  • Maurizio Zanardi

    ()
    (European Center for Advanced Research in Economics and Statistics (ECARES), Université Libre de Bruxelles)

Abstract

Many nations have undergone significant trade liberalization in the last twenty years even as they have increased their use of contingent protection measures. This raises the question of whether some of the trade liberalization efforts, at times accomplished through painful reforms, have been undone through a substitution from tariffs to non- tariff barriers. Among the new forms of protection, antidumping is the most relevant, as its use has spread from few developed countries to a large set of developing countries that are now among the most intense users of this instrument. This paper uses a newly developed database to examine to what extent the use of antidumping in a large set of countries is systematically influenced by the reduction of applied sectoral tariffs. The data set includes information on 29 developing and 7 developed countries from 1991 through 2002. After controlling for time-varying sectoral information as well as macroeconomic conditions, we find evidence of a substitution effect only for heavy users of antidumping among developing countries. In particular, a one standard deviation increase in sectoral trade liberalization increases the probability of observing an antidumping initiation by 32 percent. There is no similar statistically significant result for other developing countries or developed countries. We also find robust evidence of retaliation and deflection effects as determinant of antidumping filings across all subsamples.

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Bibliographic Info

Paper provided by The George Washington University, Institute for International Economic Policy in its series Working Papers with number 2008-09.

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Length: 38 pages
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:gwi:wpaper:2008-09

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Web page: http://www.gwu.edu/~iiep/
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Keywords: Trade Liberalization; Antidumping;

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References

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  1. Carmen M. Reinhart & Kenneth S. Rogoff, 2004. "The Modern History of Exchange Rate Arrangements: A Reinterpretation," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 1-48, February.
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  4. Chad Bown & Meredith Crowley, 2003. "Trade deflection and trade depression," Working Paper Series WP-03-26, Federal Reserve Bank of Chicago.
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  10. Michael P. Leidy, 1997. "Macroeconomic Conditions and Pressures for Protection under Antidumping and Countervailing Duty Laws: Empirical Evidence from the United States," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 132-144, March.
  11. Francois, Joseph & Niels, Gunnar, 2003. "Business Cycles, the Current Account and Administered Protection in Mexico," CEPR Discussion Papers 3981, C.E.P.R. Discussion Papers.
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  16. Thomas J. Prusa & Susan Skeath, 2001. "The Economic and Strategic Motives for Antidumping Filings," NBER Working Papers 8424, National Bureau of Economic Research, Inc.
  17. Maurizio Zanardi, 2002. "Antidumping: What are the Numbers?," Working Papers 2002_15, Business School - Economics, University of Glasgow.
  18. Alessandro Nicita & Marcelo Olarreaga, 2007. "Trade, Production, and Protection Database, 1976--2004," World Bank Economic Review, World Bank Group, vol. 21(1), pages 165-171.
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Citations

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Cited by:
  1. Kaz Miyagiwa & Huasheng Song & Hylke Vandenbussche, 2010. "Innovation, Antidumping, and Retaliation," Emory Economics 1009, Department of Economics, Emory University (Atlanta).
  2. KONINGS, Jozef & VANDENBUSSCHE, Hylke, 2009. "Antidumping protection hurts exporters : firm-level evidence from France," CORE Discussion Papers 2009042, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Michael Owen Moore & Maurizio Zanardi, 2008. "Does Antidumping Use Contribute to Trade Liberalization in Developing Countries," Working Papers 2008-01, The George Washington University, Institute for International Economic Policy.
  4. Avsar, Veysel, 2014. "Partisanship and antidumping," Economic Modelling, Elsevier, vol. 38(C), pages 190-195.
  5. Hylke Vandenbussche & Maurizio Zanardi, 2010. "The chilling trade effects of antidumping proliferation," ULB Institutional Repository 2013/136355, ULB -- Universite Libre de Bruxelles.
  6. Michael O. Moore, 2013. "Sanctuary Markets and Antidumping: An Empirical Analysis of U.S. Exporters," Working Papers 2013-3, The George Washington University, Institute for International Economic Policy.
  7. Veysel Avsar, 2010. "The Anatomy of Trade Deflection," Working Papers 1004, Florida International University, Department of Economics.

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