The Global Chilling Effects of Antidumping Proliferation

K.U. Leuven AFI Working Paper No. 0605

39 Pages Posted: 8 Mar 2006

See all articles by Hylke Vandenbussche

Hylke Vandenbussche

Catholic University of Leuven (KUL), CEPR

Maurizio Zanardi

University of Surrey - School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 2006

Abstract

Advocates of antidumping (AD) laws downplay their effects by arguing that the trade flows that are subject to AD are small and their distortions negligible. This paper is the first to counter that notion by quantifying the worldwide effect of AD laws on aggregate trade flows. 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 flows using a gravity equation spanning 21 years (1980-2000) of annual observations. Our estimates confirm that AD effects are not small. Among other findings, 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 flows are found to nearly offset the gains from trade liberalization.

Keywords: Antidumping, Gravity Equation, Trade Liberalization, Trade Flows

JEL Classification: F13, F14

Suggested Citation

Vandenbussche, Hylke and Zanardi, Maurizio, The Global Chilling Effects of Antidumping Proliferation (February 2006). K.U. Leuven AFI Working Paper No. 0605, Available at SSRN: https://ssrn.com/abstract=888460 or http://dx.doi.org/10.2139/ssrn.888460

Hylke Vandenbussche (Contact Author)

Catholic University of Leuven (KUL), CEPR ( email )

Faculty of Economics
Naamsestraat 69
B-3000 Leuven, 3000
Belgium
+32 16 326 920 (Phone)
+32 16 326 732 (Fax)

HOME PAGE: https://www.sites.google.com/site/vandenbusschehylke/home-1

Maurizio Zanardi

University of Surrey - School of Economics ( email )

Guildford, Surrey GU2 7XH
United Kingdom

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