Anti-dumping: A Growing Problem in International Trade

FOR most of its 100 years of existence, anti-dumping (AD) was not nearly the problem that it is today. In fact, for most of its existence it is fair to say that AD could hardly have been called a problem for the international trading community. Over its first 70 years, AD was neither widely adopted nor were AD duties widely imposed by the handful of countries who were AD users. Over the last 30 years, however, AD has emerged as the leading obstacle to the free and fair trading system established under the GATT/WTO. AD a problem? For some this statement must seem odd. Isn’t AD the policy that corrects a dumping problem? The short answer, is ‘no’. As it turns out, the link between dumping and anti-dumping duties is tenuous. A century ago one could plausibly argue that predatory dumping was more of a problem than antidumping. The same cannot be said today. WTO-sanctioned use of AD surely causes more injury than any reasonable person’s notion of economically harmful dumping. Today AD is a bigger problem for international trade than economically meaningful dumping (Miranda, Torres and Ruiz, 1998; Shin, 1998; Prusa, 2000; Zanardi, 2004; and Blonigen, 2003). To borrow an analogy, I am arguing that the medication (anti-dumping) is more harmful than the disease it was originally intended to treat (economically harmful dumping). One of the goals of this paper is to explain how this can be. There are two primary points to my argument. First, there is the proliferation problem. To continue the analogy, the amount of medication being administered exceeds what any reasonable doctor would prescribe to treat the disease. Second and perhaps more disconcerting it turns out that modern AD law has nothing to do with economically harmful practices; rather, AD is just a cleverly designed