Why Do We Need Antidumping Rules?
We show that the inclusion of antidumping (AD) and countervailing subsidy (CVD) regulations can increase the range of feasible preferential trade agreements (PTA), given that governments are sensitive to pressure groups defending import competing industries. AD and CVD regulations serve as an "escape valve" for pressure groups affected by the PTA in some states of the world. If the preferences of government do not differ by much from those of a welfare maximizing planner, there exist PTAs with escape clauses that provide more welfare than PTAs without escape. AD and CVD differ from safeguards in not requiring compensation to exporting countries, so a feasible agreement requires testing for injury caused by imports. Cheating on trade agree-ments is likely unless the level of pressure for protection is verifiable, and this is the role of the World Trade Organization (WTO) injury tests. If the injury tests are weakened, and the level of political pressure is less observable than expected, agreements become less valuable or may collapse.
References listed on IDEAS
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.:
- James A. Brander & Paul Krugman, 1983.
"A 'Reciprocal Dumping' Model of International Trade,"
NBER Working Papers
1194, National Bureau of Economic Research, Inc.
- Brander, James & Krugman, Paul, 1983. "A 'reciprocal dumping' model of international trade," Journal of International Economics, Elsevier, vol. 15(3-4), pages 313-321, November.
- James Brander & Paul Krugman, 1980. "A "Reciprocal Dumping" Model of International Trade," Working Papers 405, Queen's University, Department of Economics.
- James Brander & Paul Krugman, 1982. "A 'Reciprocal Dumping' Model of International Trade," Working Papers 513, Queen's University, Department of Economics.
- Hungerford, Thomas L., 1991. "GATT: A cooperative equilibrium in a noncooperative trading regime?," Journal of International Economics, Elsevier, vol. 31(3-4), pages 357-369, November.
- Hoekman, Bernard, 1998. "Free trade and deep integration : antidumping and antitrust in regional agreements," Policy Research Working Paper Series 1950, The World Bank.
- Kyle Bagwell & Robert W. Staiger, 1999.
"Multilateral Trade Negotiations, Bilateral Opportunism and the Rules of GATT,"
NBER Working Papers
7071, National Bureau of Economic Research, Inc.
- Bagwell,K. & Staiger,R.W., 1999. "Multilateral trade negotiations, bilateral opportunism and the rules of GATT," Working papers 6, Wisconsin Madison - Social Systems.
- Kyle Bagwell & Robert W. Staiger, 1989.
"A Theory of Managed Trade,"
801, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Giovanni Maggi, 1999. "The Role of Multilateral Institutions in International Trade Cooperation," American Economic Review, American Economic Association, vol. 89(1), pages 190-214, March.
- Rosendorff, B. Peter & Milner, Helen V., 2001. "The Optimal Design of International Trade Institutions: Uncertainty and Escape," International Organization, Cambridge University Press, vol. 55(04), pages 829-857, September.
- Ronald D. Fischer & Thomas J. Prusa, 2003. "WTO Exceptions as Insurance," Review of International Economics, Wiley Blackwell, vol. 11(5), pages 745-757, November.
When requesting a correction, please mention this item's handle: RePEc:edj:ceauch:134. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.