The global chilling effects of antidumping proliferation
Advocates of antidumping (AD) laws downplay their effects by arguing that the trade ï¬‚ows that are subject to AD are small and their distortions negligible. This paper is the ï¬rst to counter that notion by quantifying the worldwide effect of AD laws on aggregate trade ï¬‚ows. 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 ï¬‚ows using a gravity equation spanning 21 years (1980-2000) of annual observations. Our estimates conï¬rm that AD effects are not small. Among other ï¬ndings, 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 ï¬‚ows are found to nearly offset the gains from trade liberalization.
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