Should Developing Countries Introduce Antidumping?
In Global Economic Prospects 1995 it was explained that antidumping is ordinary protection with a good public relations program. In fact, antidumping is often more costly to importing countries than ordinary protection through tariffs. The reason a...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/903741484052470932/Should-developing-countries-introduce-antidumping http://hdl.handle.net/10986/25941 |
| Summary: | In Global Economic Prospects 1995 it was
explained that antidumping is ordinary protection with a
good public relations program. In fact, antidumping is often
more costly to importing countries than ordinary protection
through tariffs. The reason antidumping is such a costly
form of protection is that the threat of antidumping action
provides leverage to the importing country to force
exporters into settled agreements which raise export prices.
Exporters are frequently faced with the choice of having a
tariff applied against their export sales or agreeing to
raise prices (a “price undertaking”) or limit sales (a
“voluntary export restraint” or VER). Since exporters can
typically increase their profits with a price undertaking or
a voluntary export restraint, they frequently prefer a
settled agreement to the imposition of an antidumping duty.
Sometimes simply the threat of an antidumping action will
induce a settlement because the uncertainty of the
antidumping process itself will cause a loss of customers.
These settled agreements, however, impose large costs on
consumers and importing industries since they do not provide
any tariff revenue to the government. The effect on the
importing country is similar to the OPEC cartel: the
exporting countries charge higher prices to the importing
countries through an agreed limitation on sales or minimum
prices. The difference between OPEC and antidumping is that
with antidumping it is importing country policy that forces
up the prices of imports to its consumers and industries. |
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