The Impact of an Anti-dumping Measure : A Study on EU Imports of Chinese Footwear

This essay analyse the anti-dumping policy of the European Union, with specific focus on the anti-dumping tariff imposed on imports of ertain footwear from the People’s Republic of China from 1997 to 2002. Even though free trade is expected from the members of the World Trade Organization (WTO) there are certain exceptions. One is when there is a suspicion that goods are being dumped in a foreign market, i.e. the exporter sells the product at a lower price in the foreign market than in its home market. Article VI in GATT regulates this together with the Anti-dumping Agreement. In 1997 EU imposed an anti-dumping measure on certain footwear imported from the People’s Republic of China. This measure was in effect until 2002 (the maximum time for an anti-dumping tariff is five years). We expect to see a decrease of footwear exports from the People’s Republic of China to the European Union during this period. By using a log-linear regression analysis we can see that the EU imports of Chinese footwear did indeed decrease from its trend otherwise during 1997 to 2002. Since the industry overall increased its sales during the same period, we draw the conclusion that the tariff was the reason for the decreased imports