Does Trade Liberalization Promote Antidumping Protection? A theoretical analysis

         
Author Name MUKUNOKI Hiroshi (Gakushuin University)
Creation Date/NO. March 2017 17-E-031
Research Project Analyses of Trade Costs
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Abstract

Reducing trade costs by tariff reductions can be overturned if the tariff reductions induce governments to implement "contingent" protections, such as antidumping (AD) and safeguard measures. Some empirical papers have shown that a commitment to reduce tariffs leads to a more frequent use of contingent protections, while other papers have shown that such substitution effect is rarely observed. This paper theoretically explores the conditions under which a lower import tariff promotes the import country's AD actions. The result shows that the relationship between tariff reductions and AD actions is not monotone, and that lower tariff discourages AD actions under certain conditions.