EC Trade Protection Law: Produmping or Antidumping?
This paper argues that the anticipation of protection can have a 'stimulating effect on exports' instead of the commonly claimed effect of harassment. If protection serves market cartelization by fixing export quantities or prices, exporters may have an incentive to increase their sales abroad in order to secure a large share of the expected rent, which is brought about by the anticipated import restriction. This may even result in sales below marginal costs or dumping. 'The effect of the protectionist threat may then be the reverse of what is intended: it can raise the speed of import penetration and it can provoke dumping.' A formal model and a supportive institutional analysis of EC trade protection is supplemented by preliminary empirical evidence. Copyright 1994 by Kluwer Academic Publishers
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