Biases in calculating dumping Margins: The case of cyclical products
AbstractA dumping investigation involves comparing export prices with a “normal value” loosely defined as the price in the exporter’s domestic market observed in the course of normal trade. However, domestic sales with prices below production costs are excluded from the computation of a normal value; thus increasing the probability products with cyclical prices will get caught with positive dumping margins although there are no intentions to dump. The objective of the paper is to illustrate how price cycles impact the magnitude of estimated dumping margins. The empirical analysis focuses on Canadian hog exports to the U.S. and U.S. potato exports to Canada. The period and amplitude of each price cycles are estimated. The analysis starts with the assumption that export and domestic prices are equal so no true dumping occurs. Margins are then calculated based on rules that exclude below cost sales. The resulting average dumping margins for Canadian hogs and U.S. potato exports are respectively 11.5 and 5.9 percent. Biases in dumping margins depend on the nature of the cycle, the period of investigations, and the estimate of the cost of production.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2745.
Date of creation: 14 Mar 2007
Date of revision:
Anti-dumping; frequency estimation; price cycles; hog/pork trade disputes; potato antidumping case;
Other versions of this item:
- James Rude & Jean-Philippe Gervais, 2009. "Biases in Calculating Dumping Margins: The Case of Cyclical Products," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(1), pages 122-142.
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hansen, Wendy L & Prusa, Thomas J, 1997.
"The Economics and Politics of Trade Policy: An Empirical Analysis of ITC Decision Making,"
Review of International Economics,
Wiley Blackwell, vol. 5(2), pages 230-45, May.
- Wendy L. Hansen & Thomas J. Prusa, 1996. "The Economics and Politics of Trade Policy: An Empirical Analysis of ITC Decision Making," Departmental Working Papers 199621, Rutgers University, Department of Economics.
- Hartigan, James C & Kamma, Sreenivas & Perry, Philip R, 1989. "The Injury Determination Category and the Value of Relief from Dumping," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 183-86, February.
- Douglas A. Irwin, 2005.
"The Rise of U.S. Antidumping Activity in Historical Perspective,"
IMF Working Papers
05/31, International Monetary Fund.
- Douglas A. Irwin, 2005. "The Rise of US Anti-dumping Activity in Historical Perspective," The World Economy, Wiley Blackwell, vol. 28(5), pages 651-668, 05.
- Niels, Gunnar, 2000. " What Is Antidumping Policy Really About?," Journal of Economic Surveys, Wiley Blackwell, vol. 14(4), pages 467-92, September.
- Wendy L. Hansen & Thomas J. Prusa, 1995.
"Cumulation and ITC Decision-Making: The Sum of the Parts is Greater thanthe Whole,"
NBER Working Papers
5062, National Bureau of Economic Research, Inc.
- Hansen, Wendy L & Prusa, Thomas J, 1996. "Cumulation and ITC Decision-Making: The Sum of the Parts Is Greater Than the Whole," Economic Inquiry, Western Economic Association International, vol. 34(4), pages 746-69, October.
- Wendy L. Hansen & Thomas J. Prusa, 1996. "Cumulation and ITC Decision-Making: The Sum of the Parts is Greater Than the Whole," Departmental Working Papers 199422, Rutgers University, Department of Economics.
- Hartigan, James C, 2000. "Is the GATT/WTO Biased against Agricultural Products in Unfair International Trade Investigations?," Review of International Economics, Wiley Blackwell, vol. 8(4), pages 634-46, November.
- Robert W. Staiger, 2005. "Some Remarks on Reforming WTO AD/CVD Rules," The World Economy, Wiley Blackwell, vol. 28(5), pages 739-743, 05.
- Arye L. Hillman & Eliakim Katz, 1986. "Domestic Uncertainty and Foreign Dumping," Canadian Journal of Economics, Canadian Economics Association, vol. 19(3), pages 403-16, August.
- Parker, Cameron & Paparoditis, Efstathios & Politis, Dimitris N., 2006. "Unit root testing via the stationary bootstrap," Journal of Econometrics, Elsevier, vol. 133(2), pages 601-638, August.
- Bernhardt, Dan, 1984. "Dumping, adjustment costs and uncertainty," Journal of Economic Dynamics and Control, Elsevier, vol. 8(3), pages 349-370, December.
- Lambert, Remy, 2012. "A Primer on the Economics of Supply Management and Food Supply Chains," Working Papers 125246, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
- Rude, James, 2012. "Abstinence and the Single Desk: Canada â€“ US Wheat Trade Relations in a post-CWB World," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 13(2).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.