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EC trade protection law: Produmping or antidumping?

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Abstract

This paper argues that the anticipation of protection can have astimulating effect on exports instead of the commonly claimed effect of harassment. If protection serves market cartelization by fixing export quantities or prices, exporters may have an incentive to increase their sales abroad in order to secure a large share of the expected rent, which is brought about by the anticipated import restriction. This may even result in sales below marginal costs or dumping.The effect of the protectionist threat may then be the reverse of what is intended: it can raise the speed of import penetration and it can provoke dumping. A formal model and a supportive institutional analysis of EC trade protection is supplemented by preliminary empirical evidence.

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Author information

Authors and Affiliations

  1. Indian Ocean Division, IMF, 20431, Washington, DC

    Ludger Schuknecht

  2. Faculty of Economics and Statistics, University of Konstanz, P.O. Box 5560, D-7750, Konstanz, Germany

    Joerg Stephan

Authors
  1. Ludger Schuknecht
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  2. Joerg Stephan
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Additional information

We thank Lydia Ortega, Arye Hillman, Günther Schulze, Heinrich Ursprung, Roland Vaubel and an anonymous referee for their comments. An earlier version of this paper was presented at the Meeting of the European Public Choice Society, Torino, 1992.

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Schuknecht, L., Stephan, J. EC trade protection law: Produmping or antidumping?. Public Choice 80, 143–156 (1994). https://doi.org/10.1007/BF01047952

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