Does Anti-dumping Enforcement Generate Threat?
| Author | Sagnik Bagchi,K. Narayanan,Surajit Bhattacharyya |
| Date | 01 February 2014 |
| Published date | 01 February 2014 |
| DOI | 10.1177/0015732513515988 |
| Subject Matter | Articles |
Does Anti-dumping
Enforcement Generate
Threat?
Sagnik Bagchi
Surajit Bhattacharyya
K. Narayanan
Abstract
The last two decades have witnessed that countries across the world are guided
by the rules and regulations of multilateral trading institutions (for example,
World Trade Organization [WTO], International Monetary Fund [IMF]) in
order to promote free and fair trade through gradual reduction in trade bar-
riers. The world economy has noticed significant reduction in tariffs, yet we
find a rise in non-tariff barriers (NTBs). However, we still find dumping and few
other trade strategies of the exporting countries as a major hindrance to free
and fair trade. Such behaviour has led to ‘contingent protection’ as a tool of new-
protectionism. Among the contingent protection measures, anti-dumping (AD)
has evolved as the most popular choice of strategy for the trading nations. The
AD policy invokes a threat to the exporter and thereby can change its strategic
behaviour. We describe the phenomenon of dumping through a price-leadership
model and thereby compute the optimal level of AD duty that can offset dump-
ing. Using a sequential game, we conclude that the credible threat of an AD duty
restricts dumping and thereby leads to a win-win situation for both the foreign
and domestic firms.
JEL: C02, C72, D43, F13, L40
Keywords
Price–leadership, dumping, anti-dumping duty, sequential game
Article
Foreign Trade Review
49(1) 31–44
©2014 Indian Institute of
Foreign Trade
SAGE Publications
Los Angeles, London,
New Delhi, Singapore,
Washington DC
DOI: 10.1177/0015732513515988
http://ftr.sagepub.com
Sagnik Bagchi, Research Scholar, Department of Humanities & Social Sciences, Indian
Institute of Technology Bombay, Mumbai, Maharashtra. Email: bagchi.sagnik@gmail.com
Surajit Bhattacharyya, Assistant Professor, Department of Humanities and Social
Sciences, Indian Institute of Technology Bombay, Mumbai, Maharashtra. Email: surajitb@
iitb.ac.in
K. Narayanan, Professor, Department of Humanities and Social Sciences, Indian Institute
of Technology Bombay, Mumbai, Maharashtra. Email: knn@iitb.ac.in
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