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Trade Liberalization and Antidumping: Is There a Substitution Effect?

  • Michael Owen Moore

    ()

    (Department of Economics/Institute for International Economic Policy, George Washington University)

  • Maurizio Zanardi

    ()

    (European Center for Advanced Research in Economics and Statistics (ECARES), Université Libre de Bruxelles)

Many nations have undergone significant trade liberalization in the last twenty years even as they have increased their use of contingent protection measures. This raises the question of whether some of the trade liberalization efforts, at times accomplished through painful reforms, have been undone through a substitution from tariffs to non- tariff barriers. Among the new forms of protection, antidumping is the most relevant, as its use has spread from few developed countries to a large set of developing countries that are now among the most intense users of this instrument. This paper uses a newly developed database to examine to what extent the use of antidumping in a large set of countries is systematically influenced by the reduction of applied sectoral tariffs. The data set includes information on 29 developing and 7 developed countries from 1991 through 2002. After controlling for time-varying sectoral information as well as macroeconomic conditions, we find evidence of a substitution effect only for heavy users of antidumping among developing countries. In particular, a one standard deviation increase in sectoral trade liberalization increases the probability of observing an antidumping initiation by 32 percent. There is no similar statistically significant result for other developing countries or developed countries. We also find robust evidence of retaliation and deflection effects as determinant of antidumping filings across all subsamples.

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File URL: http://www.gwu.edu/~iiep/assets/docs/papers/Moore_Zanardi_IIEPWP2008-9.pdf
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Paper provided by The George Washington University, Institute for International Economic Policy in its series Working Papers with number 2008-09.

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Length: 38 pages
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:gwi:wpaper:2008-09
Contact details of provider: Web page: http://www.gwu.edu/~iiep/
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  1. Thomas Prusa & Susan Skeath, 2002. "The economic and strategic motives for antidumping filings," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(3), pages 389-413, September.
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  3. Joseph Francois & Gunnar Niels, 2003. "Business Cycles, the Current Account, and Administered Protection in Mexico," Tinbergen Institute Discussion Papers 03-054/2, Tinbergen Institute.
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  19. Feinberg, Robert M, 1989. "Exchange Rates and "Unfair Trade."," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 704-07, November.
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  21. Chad P. Bown, 2008. "The Wto And Antidumping In Developing Countries," Economics and Politics, Wiley Blackwell, vol. 20(2), pages 255-288, 06.
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  24. Michael P. Leidy, 1997. "Macroeconomic Conditions and Pressures for Protection under Antidumping and Countervailing Duty Laws: Empirical Evidence from the United States," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 132-144, March.
  25. Maurizio Zanardi, 2002. "Antidumping: What are the Numbers?," Working Papers 2002_15, Business School - Economics, University of Glasgow.
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