The Effect of Antidumping in Agriculture: A Cross-Border Comparison

Kathy Baylis, University of Illinois at Urbana-Champaign
Nisha Malhotra, University of British Columbia
Horatiu Rus, University of Waterloo

Abstract

Antidumping cases can cause significant trade diversion, reducing the effect of protection for domestic producers, and creating markets for new exporters (Prusa 1997; Bown and Crowley 2007). In this paper, we study the effectiveness of antidumping (AD) measures in agriculture. Specifically, we ask when does an AD duty restrict imports of the targeted commodity and when does it cause trade to be deflected from countries named in the AD petition to countries not named in the petition. We use AD measures in the agricultural sector imposed by Canada and the United States, the two major users of AD. In general, we find affirmative AD cases to restrict agricultural trade for both named and unnamed countries One exception is that we do observe clear trade diversion for perishable products. The more concentrated the imports, the more restrictive are the AD duties, implying that those products facing imports from a limited number of countries more can more easily create effective trade barriers using AD legislation. Last, we see a notable difference between Canada and the United States, where US AD cases cause substantial trade restriction from unnamed countries while Canadian AD cases cause trade diversion. We argue that this difference may arise because of differences in the application of AD duties.