34An Analysis of Factors Influencing

TheWorldEconomy(2007)doi:10.1111/j.1467-9701.2007.01031.x©2007TheAuthorJournalcompilation©2007BlackwellPublishingLtd,9600GarsingtonRoad,1170Oxford,OX42DQ,UKand350MainSt,Malden,MA,02148,USABlackwellPublishingLtdOxford,UKTWECWorldEconomy0378-5920©2007TheAuthorJournalcompilation©BlackwellPublishersLtd.2006XXXOriginalArticlesANTI-DUMPINGBEHAVIOURININDIANANDANABARUAHAnAnalysisofFactorsInfluencingtheAnti-dumpingBehaviourinIndiaNandanaBaruahCentreforDevelopmentStudies,Kerala,IndiaTheuseofanti-dumpingmeasuresasatradeprotectiontool,hasincreasedphenomenallyduringthelastdecade.Onesignificantaspectofthisnewtrendistheincreasinginvolvementofdevelopingcountries.Indiaisonesuchcountrywhichhasemergedasaveryfrequentuserofanti-dumpingmeasures,surpassingeventhetraditionalusers.Ithadinitiatedmorethan300anti-dumpingcasesbytheendof2002–03.Manyofthesecasesareagainstdevelopingcountries.Mostofthecasesareconcentratedinnarrowrangeproductgroups,likechemicalsandpetrochemicals,ironandsteel,pharmaceuticalsandtextiles.ThisstudyexaminesIndia’sexperiencewithanti-dumpingmeasures.Themainobjectiveofthestudyistoidentifythefactorswhichmighthaveinfluencedtheanti-dumpingbehaviourinIndia.Discussionofthesefactorsshowsthatimportshaveincreasedconsiderably.ThisisparticularlytrueforanumberofdevelopingcountriesfacingdumpingchargesinIndia.Atthesametimemanyofthedomesticproducersofthelikeproductshaveperformedpoorlyduringthelastdecade.Suchtrendsmayinstigatetheimportcompetingindustriestoseekanti-dumpingprotectionandmayalsoinfluencetheauthoritytoprovidethat.However,theresultsofourstatisticalexerciseshowsthat,althoughimportsandperformanceofthedomesticindustry,mighthaveinfluencedtheinitiationofanti-dumpingcases,thesefactorsdidnotseemtosignificantlyinfluencethefinaldecisionoftheauthority.Theresultsratherindicatedatendencyonthepartoftheauthoritytoprovideanti-dumpingprotectiontoindustries,whicharecharacterisedbylargenumberoffirms.1.INTRODUCTIONTHEunprecedentedriseintheuseofanti-dumpingmeasuresisanimportantrecentdevelopmentinthearenaofinternationaltradepolicy.Thoughtheuseofanti-dumpingmeasuresisnotanewphenomenoninthehistoryoftradepolicies,untilthe1980sitsusewasconfinedtoonlyafewtraditionaluserssuchastheUSA,theEU,Australia,CanadaandNewZealand.1Moreover,themeasurewasusedsparingly.Forinstance,duringthe1960salltheGATTmemberstogetherfiledonlyabouttenanti-dumpingpetitionsperyear(Prusa,2001).Untiltheearly1970s,lessthanfivepercentofanti-dumpingcasesresultedinduties(BlonigenandPrusa,2003).Butduringthelastdecadetherehasbeenaphenomenalriseintheuseofthismeasure.Thetraditionalusershavebeenjoinedbyanumberofothercountries,themajorityofwhicharedevelopingcountriessuchasArgentina,Mexico,India,Brazil,TurkeyandSouthAfrica.2Thesedevelopingcountriesaccountedformorethan60percentofthetotalanti-dumpinginitiationsbytheendof2003.3Suchanunprecedentedriseintheuseofanti-dumpingmeasuresinthelasttwodecadeshasledmanyeconomiststoconcludethatthisnewtrendcannotbeexplainedmerelyintermsofeconomicrationaleandthatanti-dumpingmeasureshavebecomethenewesttooloftradeprotection.Astheconventionalbarriersoftradecomedown,countriesarefoundtobeusinganti-dumpingmeasuresasa‘backdoortoprotection’.Inthiscontextanumberofstudieshavebeencarriedoutexaminingfactorswhichinfluencetheanti-dumpingbehaviourofnations.Thesestudieshavepointedoutthatsuchanti-dumpingbehaviourhasbecomesubjecttopressurefromdifferentsources.TheWTOmadetheprovisionforTheauthorgratefullyacknowledgesthehelpfulcommentsmadebyDr.K.N.Harilal,Dr.ChandanMukherjee,Dr.A.Bhattacharjeaandtheanonymousreferees.1ItwasfirstusedbyCanadaasearlyasin1904.2Foradetaileddiscussionontheworldwideuseofanti-dumpingmeasures,seePrusa(2005).3CalculatedbytheauthorfromtheWTOanti-dumpingdatabase.ANTI-DUMPINGBEHAVIOURININDIA1171©2007TheAuthorJournalcompilation©BlackwellPublishingLtd.2007anti-dumpingmeasurestoproviderelieftodomesticproducers,ifexcessiveimportscauseinjurytothem.Therefore,injurytodomesticindustryshouldbetheguidingprincipleforseekingaswellasprovidinganti-dumpingprotection.However,ashasbeenpointedoutbythesestudies,thefactorsinfluencinganti-dumpingbehaviourofnationsmaygowellbeyondtheeconomicperformanceofthedomesticfirms.Thedemandforanti-dumpingmeasuresmaycomefromthedomesticindustry,notbecausetheyaremateriallyinjuredbydumpingbutduetothe‘rent-seekingbehaviour’ontheirpart.Onthesupplyside,manytimes,theauthoritymayagreetosupplyprotectiontoconformtocertainnationaltradeorcommercialpolicygoals.Thustheavailablestudieshavetriedtobringouttheprotectionistnatureoftheanti-dumpingmeasures.However,mostofthesestudiesarecarriedoutinthecontextoftraditionalusersofanti-dumpingmeasures.Eventhoughthedevelopingcountrieshavebecomemajorusers,notmanystudieshaveexaminedtheanti-dumpingbehaviourofthesecountries.Indiaprovidesaninterestingcaseinthisregard.Itisoneofthenewmembersintheclubofanti-dumpingusers,whichhasinitiatedalargenumberofanti-dumpingcasesagainstmanyofitstradingpartners,surpassingeventhetraditionalusers.ThispaperisanattempttocriticallyanalysetheIndianexperiencewithanti-dumpingmeasures.Themajorthrustofthepaperisto