Effectiveness of the Canadian Antidumping Regime: Is Trade Restricted? Nisha Malhotra and Horatiu Rus

Dumping Surplus Shock or Demand shock Surplus Shock or Demand shock Strategic behaviour Strategic behaviour Entry Entry Predatory pricing behavior Predatory pricing behavior Price competition between markets Price competition between markets Antidumping Legislation Petition Petition International trade commission-Injury International trade commission-Injury International trade administration-Dumping International trade administration-Dumping Antidumping Duty Antidumping Duty

Chemical Industry Number of petitions=55Number of petitions=55 Highly concentrated industry Highly concentrated industry 73% of the cases: single firm73% of the cases: single firm Most cases single firms: sole producersMost cases single firms: sole producers

Decisions PRODUCTYEAR NO. OF LARGE PRODUCERS NO. OF CASESDECISION HIGH-TENACITY RAYON YARN199182A, T SULFANILIC ACID199112A POTASSIUM HYDROXIDE199233N, N, N ARAMID FIBER199311A NITROMETHANE199321N SACCHARIN199312N, N SEBACIC ACID199311A COUMARIN199411A FURFURYL ALCOHOL199413A, A, A GLYCINE199421A MANGANESE SULFATE199421N POLYVINYL ALCOHOL199534A, A, A, N

CASE: Aramid Fibre World Market, two producers World Market, two producers Petitioner=Sole producer Petitioner=Sole producer ADD imposed on imports from Netherlands ADD imposed on imports from Netherlands Bertrand Competition (price competition) Bertrand Competition (price competition) Division of the international market between the two producers Division of the international market between the two producers “ Strong demand has caused both producers to allocate aramid fiber among various customers” “ Strong demand has caused both producers to allocate aramid fiber among various customers” “ Both (the firms) negotitate with customers individually to price their products…” “ Both (the firms) negotitate with customers individually to price their products…” Usitc publication No. 3394, feb 2001

Case: Coumarin Petitioner: sole producer in the US and EU Petitioner: sole producer in the US and EU Petition against imports form China Petition against imports form China USUS EUEU

Antidumping Legislation: Protection for domestic industry Antidumping Legislation: Protection for domestic industry Dumping Dumping Reduces Competition Reduces Competition InnovationInnovation GrowthGrowth Empirical evidence :Antidumping duty restrict imports Empirical evidence :Antidumping duty restrict imports Conclusion