Antidumping Laws in the United States

March 22, 2011

The Obama administration has proposed changing several Commerce Department antidumping procedures.  Those changes would expand the scope for findings of dumping and precipitate a surge in antidumping actions, says Daniel Ikenson, associate director of the Center for Trade Policy Studies at the Cato Institute.

In the decades following World War II, interested parties gradually captured the U.S. antidumping apparatus, and the law transformed from one predicated on protecting consumers and preserving competition into a tool that suppresses competition in the name of remedying "injury" done to domestic producers.  The arcane mix of statutory rules and discretionary whimsy that emerged is a far cry from the first antidumping law -- in both practice and intent.

Honest debate about the law's purpose and consequences has been stifled by its complexity and by the persistence of highly inaccurate rhetoric about the propriety of strong antidumping rules to redress unfair foreign practices.  Armed with the pretense of a noble purpose, representatives of labor unions and import-competing industries often cite the number of antidumping initiations as evidence of the need for an even more accessible and restrictive antidumping law to better protect "us" from "them."  However, the causation implicit in that logic is backward, says Ikenson.

  • Although the real-world economic rationale for the antidumping status quo is virtually extinct, political support for this favor-doling machine remains strong and bipartisan.
  • The numerous legal and administrative changes, such as enabling the attribution of material injury to competitors in multiple countries, and disregarding home-market sales at prices below the full cost of production, further undermined the rationale for antidumping and blurred its distinction from run-of-the-mill, everyday protectionism.
  • The increase in antidumping activity reflects several developments that have nothing to do with foreign behavior, including a progressive expansion of the definition of dumping, relaxation of evidentiary standards, and a pro-domestic industry bias in the law's administration.
  • Ultimately, the antidumping remedy is a much larger problem than the dumping it is presumed to address.

Source: Daniel J. Ikenson, "Protection Made to Order: Domestic Industry's Capture and Reconfiguration of U.S. Antidumping Policy," Cato Institute, January 2011.

For text:

http://www.cato.org/pub_display.php?pub_id=12651 

For study:

http://www.cato.org/pubs/tpa/tpa-044.pdf

 

Browse more articles on Economic Issues