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Biases in Calculating Dumping Margins: The Case of Cyclical Products

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  • James Rude
  • Jean-Philippe Gervais

Abstract

A 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. The paper illustrates how price cycles affect the magnitude of estimated dumping margins. The empirical analysis focuses on Canadian hog exports to the United States and U.S. potato exports to Canada. The estimated period and amplitude of each price cycles result in average dumping margins for Canadian hogs and U.S. potato exports of 11.5% and 5.9%, respectively. Biases in dumping margins depend on the nature of the cycle, the period of investigation, and the average production cost estimate. Copyright 2009, Oxford University Press.

Suggested Citation

  • 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.
    • Handle: RePEc:oup:revage:v:31:y:2009:i:1:p:122-142
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2008.01429.x
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    References listed on IDEAS

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    1. Bernhardt, Dan, 1984. "Dumping, adjustment costs and uncertainty," Journal of Economic Dynamics and Control, Elsevier, vol. 8(3), pages 349-370, December.
    2. Robert W. Staiger, 2005. "Some Remarks on Reforming WTO AD/CVD Rules," The World Economy, Wiley Blackwell, vol. 28(5), pages 739-743, May.
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    11. Arye L. Hillman & Eliakim Katz, 1986. "Domestic Uncertainty and Foreign Dumping," Canadian Journal of Economics, Canadian Economics Association, vol. 19(3), pages 403-416, August.
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    Cited by:

    1. Rude, James, 2012. "Abstinence and the Single Desk: Canada – 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).
    2. 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).

    More about this item

    JEL classification:

    • 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; Diffusion Processes
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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