DP1010 Antitrust-based Remedies and Dumping in International Trade

Author(s): Bernard Hoekman, Petros C Mavroidis
Publication Date: August 1994
Keyword(s): Antidumping, Competition Policy, Multilateral Trade Negotiations
JEL(s): F13, K21
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1010

This paper explores the possibility of governments seeking to agree to apply competition policy-based considerations and disciplines in the context of unfair trade allegations before turning to `standard' antidumping remedies. The premise of proponents of antidumping action is that the existence of market power in an exporter's home markets, or potential market dominance in the importing, host market is an important source of perceived `unfairness'. The existence of such situations is not investigated by antidumping authorities, however. A proposal is made that allegations of dumping first be investigated by the competition authorities to determine the contestability of the relevant markets. The proposal avoids any need for harmonization of competition laws. All that would change in comparison to the status quo is that a necessary condition for antidumping is a finding by the competition authorities that the exporting firm's home market is not contestable, and the conclusion that no remedial action is possible through the application of competition law. While ideally agreement along these lines would be sought in the multilateral (GATT) context, bilateral or regional trade agreements could also be concluded. For example, EU Cooperation or Association agreements might be extended along the lines proposed.