The Anti-Dumping: The History Of Dumping

3. Theoretical Topics
3.1. History of Dumping
According to the EU policies a product is viewed as being dumped if its export price to the EU is lower than a comparable price for the like product in the ordinary course of trade or in the home country of the exporter (Andersen, 2009). The definition includes the concepts that take into consideration a comparable price, the like product, the ordinary course of trade, and the country of exports (Barcelo, 1972). These conditions are similar to those that are stipulated by the WTO law. However, under WTO law the definition of dumping includes the condition of ‘destined for consumption’. This condition is not inherent to the EU dumping definition (Andersen, 2009). Generally, dumping implies exporting goods to another destination at the rates that are considerably lower than those being charged in the home country. The WTO assumes that dumping should be prevented if it threatens to cause injury to an established industry in a market or if it is able to delay the establishment of a viable domestic industry (Paul, 2008).

One of the first contemporary definitions of dumping is “price determination and unfair competition between national markets” (Futrell, 2001, p.254). This definition is found in the provisions of the anti-dumping law in the Emergency Tariff Act of 1921 in the United States (United States Tariff Commission, 2014). The legislative aim of the law was to prevent the sale of foreign goods in the markets of the US at prices that were lower than the prices of the same goods within the US market (Futrell, 2001). Current WTO law on dumping and anti-dumping measures is stipulated in Article VI of the General Agreement on Tariffs and Trade (GATT) and in the WTO Agreement on Implement...

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...trade (%);
Weighted average tariffs applied by the country (%).

The methodology replicates the strategy adopted by Aggarwal (2004) and applies it to the cases of the US and EU. The empirical model is the following:

〖AD〗_t=α+β_1 〖Imports〗_(t-1)+β_2 〖Industry〗_(t-1)+β_3 〖Net exports〗_(t-1)+β_4 〖Tariffs〗_(t-1)+ε
(AD stands for Aggregate Demand)
The regression is estimated in Eviews (2014). The results are used to test the following hypotheses deduced from literature review:

H1: Anti-dumping regulation tends to increase during recessions and economic slowdown;
H2: An increase in growth rate of imports stimulates implementation of anti-dumping measures;
H3: Accumulation of trade surplus leads to the reduction of anti-dumping procedures;
H4: Countries with a stronger protectionist stance indicated by higher tariffs tend to be more active in anti-dumping regulation.