Welfare Effects of Introducing Antidumping Procedures in a Trade-Liberalizing Country

Welfare Effects of Introducing Antidumping Procedures in a Trade-Liberalizing Country

We analyze the national welfare consequences of trade liberalization when accompanied by the introduction of a resource-using antidumping process. The final welfare effect of liberalization depends critically on parameters that define the anti-dumping process, especially the size of the anti-dumping duties, the probability that a petition will be granted and the industry-incurred cost of seeking protection. Using a numerical simulation we generate liberalization scenarios which result in national welfare losses. We use these results to suggest ways to better assure that the reform of trade procedures results in a welfare improvement.