Biases in calculating dumping Margins: The case of cyclical products

James Rude and Jean-Philippe Gervais ()

MPRA Paper from University Library of Munich, Germany

Abstract: A dumping investigation involves comparing export prices with a “normal value” loosely defined as the price in the exporter’s domestic market observed in the course of normal trade. However, domestic sales with prices below production costs are excluded from the computation of a normal value; thus increasing the probability products with cyclical prices will get caught with positive dumping margins although there are no intentions to dump. The objective of the paper is to illustrate how price cycles impact the magnitude of estimated dumping margins. The empirical analysis focuses on Canadian hog exports to the U.S. and U.S. potato exports to Canada. The period and amplitude of each price cycles are estimated. The analysis starts with the assumption that export and domestic prices are equal so no true dumping occurs. Margins are then calculated based on rules that exclude below cost sales. The resulting average dumping margins for Canadian hogs and U.S. potato exports are respectively 11.5 and 5.9 percent. Biases in dumping margins depend on the nature of the cycle, the period of investigations, and the estimate of the cost of production.

Keywords: Anti-dumping; frequency estimation; price cycles; hog/pork trade disputes; potato antidumping case (search for similar items in EconPapers)
JEL-codes: C22 F13 Q17 (search for similar items in EconPapers)
Date: 2007-03-14
New Economics Papers: this item is included in nep-int
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Related works:
Journal Article: Biases in Calculating Dumping Margins: The Case of Cyclical Products (2009)
Journal Article: Biases in Calculating Dumping Margins: The Case of Cyclical Products (2009)
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