Anti-dumping actions in international trade

The intellectual foundations of modern anti-dumping action were laid by Jacob Viner in his classic study of the subject ("Dumping: A Problem in International Trade") published in 1923. Since then the dumping issue has been largely ignored by economists despite the passage of much new remedial legislation (including negotiation in 1967 of the GATT Anti-dumping Code), the development of a voluminous body of caselaw and extensive experience with parallel legislation, such as the United States Robinson-Patman Act, aimed at price discrimination in the domestic field. The present study re-examines the arguments against dumping within the general context of price discrimination theory and concludes that so far as there is a problem in this area it relates to predatory rather than discriminatory pricing. At the same time recent theoretical and empirical work on pricing behaviour is drawn upon to show that predatory pricing in international trade cannot properly be regarded as a real-world phenomenon demanding remedial legislation - a conclusion supported also by the mass of documentation on individual anti-dumping investigations which has accumulated during the last decade. The main body of the study is taken up with a detailed examination of post-war anti-dumping laws and their operation. This analysis suggests that modern anti-dumping policy is not merely misconceived in theory but has highly damaging trade-inhibiting effects in practice. The penalties imposed on importers discourage both dumped and undumped imports; special anti-dumping procedures for steel have strengthened the tendency towards cartelisation of the steel sector; attempted application of anti-dumping laws to East-West trade have yielded perverse results; and, more generally, the complexity, cost and unpredictability of anti-dumping actions pose (so it is argued) an increasingly serious threat to legitimate commercial transactions. The overall conclusion is that anti-dumping laws should be repealed and that where a protectionist safety-valve is considered necessary resort should be had to other, purpose-built, safeguard mechanisms such as GATT Article XIX