The International Trade Journal, 26:418, 2012

Copyright Taylor & Francis Group, LLC

ISSN: 0885-3908 print/1521-0545 online
DOI: 10.1080/08853908.2012.631866

Tariff Liberalization and the Rise

of Anti-dumping Use: Empirical Evidence
from Across World Regions
SASATRA SUDSAWASD
School of Development Economics, National Institute of Development Administration (NIDA),
Bangkok, Thailand

The relationship between tariff policy and anti-dumping use is

empirically examined. Using a panel dataset of 56 countries over
the period of 19952007, the effects of tariff liberalization on
anti-dumping use are found to vary across world regions. For
European countries, as well as developed North American and
Latin American countries, a lower tariff rate appears to induce
more use of anti-dumping measures, which emerge as a protection
tool among trade liberalization regimes. In contrast, a reduction in
a tariff rate leads to lower anti-dumping use in developing North
American and Latin American countries and in developed Asian,
African, and Middle Eastern countries. In terms of initiating anti
dumping action, developed countries are likely to be more sensitive
than developing countries to tariff policy change in most regions of
the world.
KEYWORDS anti-dumping, tariff liberalization, world regions

I. INTRODUCTION
The World Trade Organization (WTO) has succeeded in reducing tariff barriers among member countries, especially in regards to the use of import
tariffs on merchandise trade. Due to this success, many countries have
rapidly turned to other forms of non-tariff measures (NTMs) to protect their
import-competing sectors. Industrial nations were found to rely heavily on
the use of NTMs to regulate trade flows (Clark 1992). The most widespread
Address correspondence to Sasatra Sudsawasd, School of Development Economics,
National Institute of Development Administration (NIDA), 118 Seri Thai Road, Bangkok 10240,
Thailand. E-mail: sasatra@nida.ac.th
4

Tariff Liberalization and the Rise of Anti-dumping

type of protection is anti-dumping measures. Since 1980, there have been

more complaints under the anti-dumping statute than under all other trade
laws combined (Blonigen and Prusa 2003), and the number of anti-dumping
investigation filings has increased substantially.1 Hence, the rise of antidumping use can be partly regarded as an indication of tariff reduction
process success.
The patterns of anti-dumping use changed dramatically over the last two
decades. In the early 1980s, only eight countries filed anti-dumping actions,
in which more than 97% of the filings were from the major four countries: Australia, Canada, the EU, and the United States.2 Since then, there has
been an unprecedented rise in anti-dumping usage in other countries around
the world, especially among developing countries. As calculated by Baruah
(2007), more than 60% of total anti-dumping disputes in 2003 were initiated
by developing countries. There has been a noticeable shift of anti-dumping
usage from rich to poor countries (Prusa 2005).
For the distribution of anti-dumping use across world regions, the number of anti-dumping initiations has been substantially increased in Asian
countries (Figure 1). There were only 29 cases filed for anti-dumping investigation in 1995, considerably small numbers comparing with 89 cases filed
in 2008. North American and Latin American countries experienced a small
reduction in the number of anti-dumping filings from 74 cases to 69 cases
during the same period. On average, the time patterns of anti-dumping usage
are distinct across world regions.
The regions share of total world regional anti-dumping filings also
changed significantly (Figure 2). For instance, Asian countries had notably

FIGURE 1 Number of anti-dumping initiations by world regions (color figure available

online).
Source: The data are obtained from http://www.wto.org. Note that the European Community is treated
as a single country.

For instance, as reported on the WTO website, there were 366 cases reported for anti-dumping
investigation in 2001, more than double the 157 cases reported in 1995.
2
For a review and discussion on trends in worldwide anti-dumping use, see Prusa (2005).

S. Sudsawasd

FIGURE 2 Share of anti-dumping initiations by world regions (color figure available online).
Source: The data are obtained from http://www.wto.org. Note that the European Community is treated
as a single country.

a larger share of anti-dumping initiations over the period 19952008 (from

18% in 1995 to almost 43% in 2008). In contrast, the share by North American
and Latin American countries had declined significantly (from 47% in 1995 to
33% in 2008); and the share by European countries region was quite stable
(around 22%) during the same period.
Although an analysis of the factors influencing anti-dumping use
appears to be one of the most popular international trade topics, most existing research is focused on the experiences of the major four countries (e.g.,
Feinberg 1989; Knetter and Prusa 2003).3 It is inappropriate for one to expect
that the findings would be the same for other countries, especially when
comparison countries are quite dissimilar, as well as when political perceptions on anti-dumping measures are different. Besides, one may expect that
a region where a country resides can be one of the factors influencing the
use of anti-dumping measures in each country. Therefore, one of the interests of the current study is to examine what contributing factors underlie the
shift of worldwide anti-dumping filing usage in each region.
As stated, the surge in the use of anti-dumping measures is found to be
associated with the success of GATT/WTO in reducing world tariff barriers.
Thus, a link between tariff policy and anti-dumping usage would reasonably be expected. Early attempts to empirically examine the determinants
of macroeconomic factors, including the tariff factor, on anti-dumping frequency have been made by Irwin (2005) and Aggarwal (2004). Irwin (2005)
focused on various determinations of anti-dumping filings in the United
States and found that an increase in the average tariff rate leads to more
anti-dumping filings. However, his findings are inconsistent with those of
Aggarwal (2004), who used panel data for 99 countries over the period of
19802000 and found a negative relationship between the average tariff rate
3

For a comprehensive review of the literature on anti-dumping, see Blonigen and Prusa (2003).

Tariff Liberalization and the Rise of Anti-dumping

and the frequency of anti-dumping use in developing countries, whereas the

relationship was found to be insignificant for developed countries.
Aggarwals findings are contrary to the conventional view, in which antidumping is considered to be a tool of administered protection used against
the prevailing trade liberalization. Although a shift in anti-dumping usage
away from developed countries is obvious, developed countries are still the
major users of such measures.4 Hence, a significant relationship between
tariff policy and the number of anti-dumping filings in developed countries
would be expected.
The current study aims to empirically examine the relationship between
tariff policy and anti-dumping use categorized by a region where countries
reside. A negative binomial model is used for the estimation and the data
include a panel of 56 countries from 19952007.5 The findings will contribute
to better understanding of the change over time in anti-dumping patterns
in different world regions. The article is organized as follows. In the next
section, an empirical model examining the link of tariff policy and the use of
anti-dumping measures is presented; whereas, the data and empirical issues
are discussed in the third section. The fourth section contains the empirical
findings. And concluding remarks are presented in the final section.

II. MODEL SPECIFICATION

As suggested by Knetter and Prusa (2003), the number of anti-dumping
filings is determined by real exchange rates, the filing countrys GDP, and
the GDP of the rest of the world. This study augments the standard framework by adding the filing countrys trade balance and tariff policy variables
to examine the effects of the countrys trade environment and tariff liberalization policy on anti-dumping filings. The model specification of anti-dumping
filings in country i in the year t is therefore:
(?)

(?)

(-)

(-)

(?)


ADit = f REERit , GDPit , WGDPit , TBALit , Tariffit ,


where
ADit = the number of anti-dumping initiations,
4

See Table 3 in Prusa (2005).

The 56 countries are: Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, Chile, China,
Colombia, Costa Rica, Czech Republic, Denmark, Ecuador, Egypt, Finland, France, Germany, Greece,
Guatemala, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Latvia, Lithuania, Luxembourg, Malaysia,
Mexico, Netherlands, New Zealand, Nicaragua, Pakistan, Panama, Paraguay, Peru, Philippines, Poland,
Portugal, Slovenia, South Africa, South Korea, Spain, Sweden, Taiwan, Thailand, Trinidad and Tobago,
Turkey, Ukraine, United Kingdom, United States, Uruguay, and Venezuela.

S. Sudsawasd

REERit = the real effective exchange rate,

GDPit = the domestic real GDP (in 2000 constant dollars),
WGDPit = the real GDP of the rest of the world (in 2000 constant dollars),
TBALit = the net trade balance as a ratio of total trade (percentage), and
Tariffit = average tariff rate (percentage).

There are two basic requirements to pursue anti-dumping lawsuits. First,

less than fair value, or LTFV, occurs when foreign exporters are found to set
the price of a product either below the normal price it charges in other markets or below the cost of production plus a normal profit. Second, material
injury occurs when the domestic industry is found to suffer from dumped
imports. The basic requirement for the determination of such injury is that
there must be evidence of the volume and price effects of dumped imports
and a consequent impact of dumped imports on the domestic industry. The
number of anti-dumping filings is presumed to have a positive relation with
the likelihood of affirmative LTFV and injury determinations.
Thus, given those two requirements described above, a change in the
real exchange rate has theoretically ambiguous effects on the number of antidumping filings. As shown in Knetter and Prusa (2003), a real appreciation
of the domestic currency increases the possibility of material injury, but
reduces the chance of LTFV. Using data on the four primary anti-dumping
users, Knetter and Prusa found a positive relationship between the real effective exchange rate and anti-dumping filings. On the contrary, using U.S. data,
Feinberg (1989) found an inverse relationship.
An increase in the domestic import countrys GDP has an ambiguous
impact on the number of filings. Countries in a recession are more likely to
file anti-dumping complaints, as the probability of an affirmative material
injury increases. In addition, if a foreign firm lowers its price in order to
maintain its level of exports, it is more likely for a foreign firm to be guilty
of the LTFV determination. However, due to differing political pressure, it is
possible that import countries with higher GDP may use more anti-dumping
to protect the domestic industry. Thus, the relationship between the filing
countrys GDP and anti-dumping use is unclear.
An increase in the GDP of the rest of the world is hypothesized to have a
negative impact on the use of anti-dumping measures. An exporting foreign
firm in a recession economy may decide to lower its export price in order
to stabilize its excess supplies in the home country. Thus, an increase in the
possibility of LTFV filings would be expected. For the trade balance variable,
a widening in the filing countrys trade deficit may increase the probability
of affirmative material injury determination and the more likely that antidumping action will be used (Aggarwal 2004, and Feaver and Wilson 2004).
The relationship between the filing countrys trade balance and the number
of anti-dumping filings is expected to be negative.

Tariff Liberalization and the Rise of Anti-dumping

A change in tariff policy is hypothesized to have ambiguous effects on

the number of anti-dumping filings. A reduction in an import tariff reduces
domestic firms price in the market. As a result, the profits of domestic
firms are likely to decrease. Under such circumstances, the likelihood of
filings related to material injury would increase. Hence, tariff liberalization
increases the possibility of filing for material injury. This is in a line with the
view that anti-dumping measures are used to ensure some level of protection
for the domestic industry against a dramatic surge in import competition.
On the other hand, the effects of a lower tariff rate on the LTFV determination are less clear. Although the export price (the price after including
import taxes) of a foreign firm is expected to decrease, it is uncertain whether
a foreign firm will lower its sale price (the price before including import
taxes). If a foreign firm increases its sale price (since it may possess some
market power), an affirmative LTFV determination would be less likely.
In contrast, if the sale price is decrease, a foreign firm would be more likely
to be guilty of the LTFV determination. Therefore, the overall relationship
between tariff policy and anti-dumping usage is theoretically ambiguous.
Moreover, it may differ in each world region. It is now a matter of empirical
evidence.

III. DATA AND EMPIRICAL ISSUES

Data on explanatory variables are extracted from the World Banks World
Development Indicators (WDI )-2009 CD-ROM, and anti-dumping initiation
filings per year are collected from the WTO website (http://www.wto.org).
In this analysis, a panel dataset of 56 reporting countries over the period
19952007 is employed. For the purpose of a comparative analysis, the
56 countries are divided into three regional groups. They are
1. North America and Latin America,
2. Europe, and
3. Asia, Africa, and the Middle East.6
The choice of regional groups identified in this analysis was determined
by the availability of data for each world region. As stated, it is possible that
the level of development may have some influences on the number of antidumping use in each country. Thus, the estimation results for developed and
developing countries could vary substantially. Hence, the model is estimated
separately for developed and developing countries in each regional group
dataset.
6

The composition of countries in each region follows the region classification used in the WTOs
International Trade Statistics.

10

S. Sudsawasd

The real effective exchange rate is defined as the nominal exchange rate
adjusted for the effects of inflation by multiplying the ratio of the reporting
countrys consumer price index to another major countrys consumer price
index, where the United States is used as the base country for simplicity.
A rise in the real effective exchange rate would indicate an appreciation of
the real exchange rate of the reporting countrys currency relative to the US
dollar.
For the tariff policy variable, an average tariff rate is measured by the
ratio of customs and other import duties to the total imports of the reporting
country. As shown in Figure 3, the trends of the average tariff rate have
declined over time in each world region, especially in Asian, African, and
Middle Eastern countries that experienced a substantial decrease in the tariff
rate. Meanwhile, the tariff rate in European countries moved less than the
tariff rate in other countries. This is clearly because the tariff rate in European
countries was relatively low. Hence, they may be very sensitive to a tariff
reduction.
The number of anti-dumping initiation filings is based on non-negative
count data, and the negative binomial model is used for the estimation. The
negative binomial model is an extension of the Poisson model, which allows
for an over-dispersion structure, in which the variance of a dependent count
variable is greater than its mean.7 Due to the nature of panel data, both fixedand random-effects estimators are employed to accommodate heterogeneity
across countries. This study employs the Hausman (1978) specification test to
decide between the fixed-effects or random-effects model. The Hausman test
did not reject the null hypothesis in which the estimated coefficients between

FIGURE 3 Average tariff rate (color figure available online).

See Greene (2003) and Cameron and Trivedi (1998) for more details on the treatment of
econometric models for count data.

Tariff Liberalization and the Rise of Anti-dumping

11

the two estimators were statistically indifferent. Hence, the random-effects

model was chosen as the main estimator for further analysis.8

IV. EMPIRICAL FINDINGS

Tables 14 present the estimation results of factor determinants of antidumping filings in each world region, in which the incidence rate ratios
are reported. The incidence rate ratio is defined as the ratio of the expected
counts where the variable of interest is a one unit increase from its mean
value and other variables are at their mean values to the expected counts
when all variables are at their mean values.9 Based on the log-likelihood
statistics, the inclusion of the trade balance and tariff variables in the estimate versions of the model without tariffs as in Knetter and Prusa (2003)
improves the model fit. The findings can be analyzed as follows:
When the pooled data of all 56 countries are used, the real exchange
rate variable is not robustly and significantly related to the number of
anti-dumping filings. Although the estimated coefficient appears positively
significant in the regressions without the tariff variable (Equations 1 and 2),
indicating more use of anti-dumping measures associated with an appreciation of real exchange rate, it turns insignificant with the inclusion of the tariff
variable (Equation 3). When the model is estimated separately for developed
and developing countries (Equations 4 to 9), none of the estimated coefficient of the real exchange rate variable is shown to be significant. In addition,
when the model is estimated for each regional group, the insignificance of
the real exchange rate variable is found most often.
The estimated coefficient of the domestic GDP variable is mostly significant and has a positive sign. 10 The findings indicate that political pressure
related to anti-dumping use may change with domestic GDP levels. Countries
with higher GDP have a greater tendency to use anti-dumping measures to
protect their domestic industry from import competition. The GDP of the
rest of the world variable appears to be negatively related to the number
of anti-dumping initiations when the pooled data of all countries for each
regional group dataset are used (except Asian, African, and Middle Eastern
regions, in which the estimated coefficient is not significant.) Hence, in a
recession, an export country is shown to have a strong tendency to lower its
export price to less than fair value, resulting to more anti-dumping use in

The estimation results of the fixed-effects stimators are available upon request.
For example, if the reported IRR for the tariff rate is two, it indicates that one unit increase in the
tariff rate would increase the expected counts (the number of AD filings) by 100% holding other variables
constant, comparing with when all variables are at their means.
10
Except when the datasets of developed countries were used, the estimated coefficient of the GDP
variable was mostly insignificant.
9

12

1932.33
61.53
713

1906.53
65.06
707

1.1308
(0.0408)
1.3630
(0.0877)
0.3580
(0.0863)
1.0005
(0.0036)

1.1386
(0.0407)
1.3279
(0.0862)
0.3594
(0.0857)

1031.71
57.17
422

1.0675
(0.0458)
1.5902
(0.1256)
0.2232
(0.0973)
1.0022
(0.0048)
0.9647
(0.0166)

1119.71
41.43
325

1.0976
(0.0711)
0.9167
(0.0661)
0.2241
(0.0566)

1099.92
42.29
320

1.0774
(0.0721)
0.9090
(0.0693)
0.1938
(0.0519)
0.9917
(0.0056)

760.08
97.98
388

0.9726
(0.0365)
2.0815
(0.1545)
0.6696
(0.3119)

754.47
100.34
387

0.9646
(0.0368)
2.1763
(0.1735)
0.7853
(0.3746)
0.9919
(0.0051)

458.34
84.73
253

0.9592
(0.0430)
2.1084
(0.1886)
2.6002
(1.9665)
0.9992
(0.0063)
1.0196
(0.0164)

Developing countries

denote 1%, 5%, 10% significant levels, respectively.

541.07
22.48
169

1.0107
(0.0892)
1.0137
(0.1201)
0.1336
(0.0605)
0.9969
(0.0071)
0.8396
(0.1232)

Developed countries

Note: Estimates are reported as incidence rate ratios. Standard errors are in parentheses.

Loglikelihood
Wald X 2
No. of obs.

Tariff i

TBALi

ln WGDP i

ln GDP i

ln REER i

All countries

All regions

TABLE 1 Determinants of the Number of Anti-Dumping Initiations (ADi ): Random-Effects Negative Binominal Model

13

431.19
28.05
213

1.0617
(0.0673)
1.3603
(0.1529)
0.2871
(0.1286)

430.35
27.16
213

1.0773
(0.0748)
1.2693
(0.1564)
0.3201
(0.1489)
0.9919
(0.0063)

11

244.80
85.12
128

0.9780
(0.0660)
1.7551
(0.1522)
0.0593
(0.0553)
1.0089
(0.0062)
1.1175
(0.0539)

12

116.63
58.23
39

1.1669
(0.7307)
1.3428
(0.2221)
0.3567
(0.2387)

13

116.48
57.70
39

1.8091
(1.8575)
1.1432
(0.3862)
0.3531
(0.2378)
0.9898
(0.0186)

14

295.07
82.06
174

1.0119
(0.0584)
2.6018
(0.3324)
0.1932
(0.1213)
0.9852
(0.0066)

17

18

157.13
63.53
101

0.9964
(0.0713)
2.5038
(0.3496)
0.4770
(0.6161)
0.9883
(0.0086)
1.1437
(0.0528)

Developing countries

denote 1%, 5%, 10% significant levels, respectively.

297.75
82.09
174

1.0255
(0.0556)
2.3395
(0.2629)
0.1010
(0.0580)

0.0327
(0.0390)
5.0503
(2.0748)
0.0010
(0.0014)
1.1110
(0.0342)
0.5578
(0.1796)
71.91
75.15
27

16

15

Developed countries

Note: Estimates are reported as incidence rate ratios. Standard errors are in parentheses.

Loglikelihood
Wald X 2
No. of obs.

Tariff i

TBALi

ln WGDP i

ln GDP i

ln REER i

10

All countries

North American and Latin American regions

TABLE 2 Determinants of the Number of Anti-Dumping Initiations (ADi ): Random-Effects Negative Binominal Model

14

957.44
29.92
299

0.9409
(0.1339)
1.3904
(0.1572)
0.1857
(0.0598)

936.12
35.95
294

0.9816
(0.1469)
1.4854
(0.1650)
0.1978
(0.0668)
1.0077
(0.0068)

20

400.25
69.96
154

1.2147
(0.2252)
1.9907
(0.2884)
0.0794
(0.0399)
0.9968
(0.0083)
0.4300
(0.1219)

21

825.23
37.55
221

0.8990
(0.1188)
1.0399
(0.1012)
0.1609
(0.0495)

22

805.86
38.97
216

0.8694
(0.1193)
1.0756
(0.1111)
0.1343
(0.0451)
0.9932
(0.0067)

23

24

88.60
43.85
78

1.9805
(0.7779)
2.1488
(0.3802)
3.9409
(5.9447)
0.9978
(0.0455)

2.0111
(0.4587)
2.1432
(0.3606)
3.8600
(5.5691)

88.60
43.99
78

26

25

27

37.46
18.74
49

0.5890
(0.3886)
3.1592
(0.9368)
0.0838
(0.3576)
0.8176
(0.0788)
1.5089
(0.7606)

Developing countries

denote 1%, 5%, 10% significant levels, respectively.

349.75
16.29
105

0.8604
(0.2317)
1.1450
(0.2375)
0.1268
(0.0675)
0.9953
(0.0077)
0.6546
(0.2369)

Developed countries

Note: Estimates are reported as incidence rate ratios. Standard errors are in parentheses.

Loglikelihood
Wald X 2
No. of obs.

Tariff i

TBALi

ln WGDP i

ln GDP i

ln REER i

19

All countries

European region

TABLE 3 Determinants of the Number of Anti-Dumping Initiations (ADi ): Random-Effects Negative Binominal Model

15

522.79
2.82
201

0.9719
(0.0588)
1.1993
(0.1715)
1.5319
(0.9151)

518.10
2.38
200

0.9735
(0.0620)
1.1799
(0.1783)
1.4777
(0.8960)
1.0006
(0.0093)

29

346.58
44.07
140

0.9411
(0.0570)
1.7964
(0.2335)
4.9505
(4.4215)
1.0080
(0.0122)
1.0166
(0.0225)

30

164.08
6.14
65

0.9719
(0.0976)
0.6095
(0.1521)
0.2971
(0.2725)

31

162.47
10.88
65

0.8809
(0.0989)
0.6294
(0.1479)
0.2897
(0.2680)
0.9584
(0.0224)

32

343.18
23.60
135

0.9265
(0.0651)
1.7139
(0.2451)
2.2327
(1.7034)
0.9959
(0.0097)

35

36

239.84
40.18
103

0.9063
(0.0744)
1.7770
(0.2774)
23.8073
27.49
1.0136
(0.0141)
1.0355
(0.0254)

Developing countries

denote 1%, 5%, 10% significant levels, respectively.

347.81
24.31
136

0.9346
(0.0629)
1.6732
(0.2024)
2.2738
(1.7057)

1.1465
(0.0739)
1.8299
(0.3887)
0.2385
(0.3650)
1.0224
(0.0244)
1.4932
(0.2438)
94.99
33.55
37

34

33

Developed countries

Note: Estimates are reported as incidence rate ratios. Standard errors are in parentheses.

Loglikelihood
Wald X 2
No. of obs.

Tariff i

TBALi

ln WGDP i

ln GDP i

ln REER i

28

All countries

Asian, African, and Middle Eastern regions

TABLE 4 Determinants of the Number of Anti-Dumping Initiations (ADi ): Random-Effects Negative Binominal Model

16

S. Sudsawasd

an import country. However, the estimation results for developed and developing countries are very distinct. For instance, the negative and significant
relationship is found only in developed European countries, whereas the
relationships for developed countries in other regions are not significant.
Next, the estimated coefficient of the countrys trade balance variable
is surprisingly insignificant in most of the model estimations, regardless of
which regional group dataset is used. Hence, the results point to which the
countrys trade environment measured by the countrys trade balance is not
a significant determinant factor of the anti-dumping use.
For the tariff variable, when the pooled datasets of all countries are
used (Equation 3), a tariff rate has a negative impact on anti-dumping use.
As indicated, a 1% reduction in a tariff rate leads to a 3.53percentage point
increase in the number of anti-dumping initiations. These findings are consistent with Aggarwal (2004) and suggest that anti-dumping measures have
been used as a measure to provide protection for the domestic industry from
tariff liberalization policy.
When this study estimates the effects of tariff policy in each world
region, the estimation results vary widely. In general, the findings are along
the same lines as Knetter and Prusa (2003), whose findings also vary by
user. Developed countries in the North American and Latin American regions
are found to use more anti-dumping measures when a tariff rate decreases
(Equation 15). A 1% reduction in the tariff rate leads to a 44.2percentage point increase in the anti-dumping cases. The findings point to which
developed countries in these regions used anti-dumping as a substitution
from tariff liberalization. In contrast, developing North American and Latin
American countries are found to file a 14percentage point less in the number
of anti-dumping initiations with a 1 % reduction in a tariff rate (Equation 18).
Hence, tariff liberalization policy has different effects on anti-dumping usage
in developed and developing countries in the North American and Latin
American regional group.
The estimated coefficient of the tariff variable is negative and significant
when an all-European countries dataset is used (Equation 21). A one% reduction in a tariff rate leads to a 57 percentage point increase in the number of
anti-dumping initiations. This finding suggests that European countries are
very sensitive to a change in a tariff rate and may respond by a dramatic
increase in the anti-dumping use. This is perhaps because the tariff rate in
this region is already low so that the decline in the tariff rate has a very large
impact on the anti-dumping measure. However, the estimated coefficient of
the tariff variable turns insignificant when the model is estimated separately
for developing and developed countries datasets.
For developed countries in the Asian, African, and Middle Eastern
regions, a change in a tariff rate has a significant impact on anti-dumping
use. A 1% reduction in a tariff rate leads to a 49percentage point decrease in

Tariff Liberalization and the Rise of Anti-dumping

17

the number of anti-dumping initiations. Hence, tariff liberalization policy in

these countries does not induce more use of anti-dumping measures.
Finally, when the sizes of the estimated coefficients of the tariff variable
for developed and developing countries are compared, developed countries
appear to be more sensitive than developing countries to a change in a tariff
rate. This suggests that the motivations for the use of anti-dumping measures
when tariff policy changes are likely are stronger in developed countries.

V. CONCLUSION
This study examined empirically how tariff policy influences the likelihood
of anti-dumping filings. The empirical evidence shows that the effects of tariff
liberalization on anti-dumping use vary across world regions. For European
countries, as well as developed North American and Latin American countries, a lower tariff rate is associated with greater use of anti-dumping
measures. Anti-dumping appears to emerge as a protection tool among
regions with trade liberalization regimes.
In contrast, in developing North American and Latin American countries,
a decline in the tariff rate leads to a significant reduction in the use of antidumping measures. Hence, the findings suggest that these countries have
committed more to free trade in reducing both tariff and non-tariff barriers.
In most regions of the world, developed countries are likely to be more sensitive than developing countries to tariff policy changes in terms of initiating
anti-dumping action.
The empirical findings in this study are contrary to the view that developed countries are usually strong advocates of free trade. They are more
likely to be under political pressure to use anti-dumping as a way to protect the domestic industry from a rise in import competition. Clearly, this
may hamper the gains from free trade. Therefore, it is important for each
country to make a stronger commitment to free trade and to try to minimize
anti-dumping abuse, especially in European countries, as well as developed
North American and Latin American countries.

ACKNOWLEDGMENTS
This study was funded by the Thailand Research Fund under contract number MRG5080155. The author would like to thank Dr. Wisarn Pupphavesa
and Dr. Robert E. Moore for their constructive comments and Varachat
Numchaisri and Siam Sakaew for their outstanding research assistance.

18

S. Sudsawasd

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