The welfare effects of a european anti-dumping duty and price-undertaking policy

Wilfried Pauwels and Linda Springael

Atlantic Economic Journal, 2002, vol. 30, issue 2, 135 pages

Abstract: In the framework of its anti-dumping policy, the European Union can use two instruments: an anti-dumping duty and a price-undertaking. The objective of both instruments is to eliminate the price difference, on the European market, between a European product and a similar foreign product which is dumped on the European market. The authors first briefly look at the institutional framework within which the European Union operates, and at the actual use made of the two instruments since 1980. The main purpose of the paper is to show that, from a welfare point of view, an anti-dumping duty is always better than a price-undertaking. This result is very robust: it holds for quasi-linear preferences, under both Bertrand and Cournot competition, and irrespective of the timing of the firms' decisions. Copyright International Atlantic Economic Society 2002

Date: 2002
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DOI: 10.1007/BF02299157

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