Import Diversion Under European Antidumping Policy

Abstract

This Paper studies empirically the effects of European antidumping actions on import diversion from importers 'named' in an antidumping investigation, and potentially subject to protectionist measures, to countries 'not named' in the investigation. For this purpose we use a unique data set at the 8-digit product level. The amount of import diversion can be regarded as an indication of the effectiveness of antidumping policy, which is used to protect the home industry from foreign imports. We find that trade diversion in the European Union caused by antidumping actions-in contrast to the US-is limited, suggesting that the EU's antidumping policy is more effective in keeping imports out. This result holds even after controlling for selection-bias in the antidumping investigation procedure. A number of explanations for this difference in trade diversion as a result of antidumping policy between the EU and US are formulated.

Keywords: Antidumping measures, econometric resting, trade diversion

JEL Classification: F13, L13, L50