Does Antidumping Address 'Unfair' Trade? The European Union's Experience

Abstract

While antidumping laws were originally developed as the international trade analogue of domestic competition or antitrust policies, most vestiges of competition policy disappeared early in their evolution. Nonetheless, the formal justification for modern antidumping practice remains founded on the bedrock of countering “unfair” trading practices and preserving competitive markets. Consistent with this formal rationale, antidumping law has been replaced by competition policy mechanisms in some instances, such as in the European Union’s internal market and in a number of bilateral free trade agreements. We update and consolidate a relatively thin literature that has examined this issue formally. Adapting the established methodology, we develop a “likelihood of predatory practice” index which categorizes antidumping cases in line with the probability that they indeed constitute cases of predatory behavior which might legitimately have triggered competition policy actions had they occurred in a domestic market context. We apply this index to the European Union’s use of antidumping proceedings in its extra-EU trade over the period 2001 to 2010. Overall, we find more instances than previous studies where the EU antidumping measures address cases which would attract competition policy actions, although these are still a minority.

Keywords: Trade remedies, anti-dumping, competition policy, European Union

JEL Classification: F13, F14