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Anti‐dumping measures as a tool of protectionism: A mechanism design approach

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  • Leonard K. Cheng
  • Larry D. Qiu
  • Kit Pong Wong

Abstract

In this paper we explore the design of optimal incentive‐compatible anti‐dumping (AD) measures. When the weight given to the domestic firm's profit in the government's objective function is relatively small, it is shown that no AD duty should be imposed if the foreign firm reports its own costs, but a constant AD duty should be imposed if the domestic firm reports the foreign firm's cost. When this weight is large, in either case of reporting the AD duty is a prohibitive tariff. The optimal AD measures are modified in the presence of a GATT/WTO constraint. JEL Classification: F12, F13 Les mesures anti‐dumping en tant qu'outil de protectionnisme: une approche en termes de construction de mécanismes. Ce mémoire examine la construction de mesures optimaales anti‐dumping (AD). Quandla valence des profits de la firme domestique est faible dans la fonction objective du gouvernement, on peut montrer qu'aucune mesure AD ne devrait être imposée si l'entreprise étrangère révèle ses propres coûts, mais qu'un droit AD constant devrait être imposé si c'est la firme domestique qui révèle les coûts de l'entreprise étrangère. Quand la valence des profits de la firme domestique est grande, quelle que soit la source de l'information, la mesure AD qui s'impose est un droit de douane prohibitif. Les mesures optimales doivent évidemment être modifiées pour prendre en compte la contrainte engendrée par l'existence des règles du GATT/OMC.

Suggested Citation

  • Leonard K. Cheng & Larry D. Qiu & Kit Pong Wong, 2001. "Anti‐dumping measures as a tool of protectionism: A mechanism design approach," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 34(3), pages 639-660, August.
    • Handle: RePEc:wly:canjec:v:34:y:2001:i:3:p:639-660
    DOI: 10.1111/0008-4085.00092
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    Cited by:

    1. Xenia Matschke & Anja Schöttner, 2013. "Antidumping as Strategic Trade Policy under Asymmetric Information," Southern Economic Journal, John Wiley & Sons, vol. 80(1), pages 81-105, July.
    2. Patrice Cassagnard, 2009. "Antidumping, Social Quality of Goods and Smear Campaign," Working Papers hal-01880359, HAL.
    3. Qiu, Larry D., 2003. "Reply," Journal of International Economics, Elsevier, vol. 61(1), pages 247-248, October.
    4. repec:lic:licosd:20008 is not listed on IDEAS
    5. Wu, Shih-Jye & Chang, Yang-Ming & Chen, Hung-Yi, 2014. "Antidumping duties and price undertakings: A welfare analysis," International Review of Economics & Finance, Elsevier, vol. 29(C), pages 97-107.
    6. Matloob Piracha, 2004. "Export Subsidies and Countervailing Duties Under Asymmetric Information," Studies in Economics 0410, School of Economics, University of Kent.
    7. Patrice CASSAGNARD, 2009. "Antidumping, Social Quality of Goods and Smear Campaign," Working Papers 10, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Nov 2009.
    8. Patrice Cassagnard, 2009. "Antidumping, Social Quality of Goods and Smear Campaign," Working papers of CATT hal-01880359, HAL.
    9. Huynh, Pham Duy Anh, 2023. "Non-market economy status in anti-dumping investigations and proceedings: A case study of Vietnam," OSF Preprints esw4b, Center for Open Science.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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