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    • Nelson states that the antidumping mechanism

    2018-11-13

    Nelson (2004) states that the antidumping mechanism is used more for protection than for avoiding the unfair-trade. According to him, it is due to the AD legislation itself, which is obscure and excessively detailed, and, in many cases, allows the applicant to obtain a better protection than if it had sought other legal means. In the author\'s opinion: “antidumping protection is particularly bad protection. This is a classic “political economy problem”: a policy this bad can’t be the product of rational policy making, it must be the product of a process distorted by politics.”Davis (2009, p. 1) summarizes how this instrument has been used lately: “Most economists are of the opinion that antidumping has little to do with ‘unfair’ trade. In general, suspicions are high that domestic industries are turning to antidumping as a form of protectionism.” This lack of transparency about the AD regulation has contributed to boost this practice and nowadays it is one of the most used protection tools. Araújo et al. (2001) point out yet another reason for the vast use of this resource. According to the authors, under the argument of “unfair trade”, these measures end up turning the attention away from the lack of competitiveness of the domestic companies. It makes the antidumping actions attractive as an instrument of protection and grants them some political appeal. Therefore, the AD measures, based on the fair-trade argument, are generally used to favor the less competitive companies. Although this kind of protection not follow the paradigms of orthodox nk1 receptor that each country should export what it produces with greater efficiency in a barrier-free environment (Smith, 1776; Ricardo, 1821; Heckscher, 1919; Ohlin, 1933), the heterodox stream does not ignore the possible benefits caused by protection mechanisms. For the latter group, free-trade could be harmful, mainly for the least developed and competitive economies. According to List (1841), who became known for his favor toward the protection of “Infant Industries”, countries with underdeveloped industries would not be able to compete with economies that hold a mature industrial park without some type of protection or State intervention. In spite of the controversy regarding the AD use as an instrument of protection, there is an application that goes beyond these two currents of economic thought. Theuringer and Weiss (2001) raised the hypothesis that the AD mechanism could be used not only to favor the less competitive companies, but also those that already have a high level of competitiveness. Thus, the AD instrument could cause an opposite effect to that one expected by its policy makers. In other words, rather than inhibiting the unfair-trade by protecting the less competitive companies, it would be acting as an entry barrier against new competitors, and consequently, it would be contributing to the strengthening of the already consolidated companies. Firme and Vasconcelos (2012, p. 271) also point out this possibility for AD instrument use. For them this mechanism could be used to inhibit the entry of new competitors in any specific market. Peng et al. (2008, p. 925) argue that researches related to entry barriers have concentrated efforts on economic variables, such as economies of scale and product differentiation. Therefore, papers based on institutional variables that consider trade barriers, such as the AD laws, as an entry barrier are rare. Independently of the type of AD use, it has spread. Bloningen and Prusa (2001) state that, in the last 25 years, the AD have emerged as one of the main tools of trade protection. While the traditional barriers, such as tariffs and quotas, were eliminated by the GATT/OMC treaties, the AD spread.Quinn and Slayton (1982) reveal that in the 70s this type of protection had evolved to the point that it became an explicitly discussed issue at the Tokyo round, promoted by GATT/OMC during 1973–79. Regarding the distribution of its use among countries, Davis (2009, p. 3) declared that the AD instrument suffered a turnabout after 1994, with the end of the Uruguay Round: “In terms of global usage, the introduction of a requirement for countries to report anti-dumping actions in the 1980s revealed the US and EU as heaviest users throughout the 1980s and early 1990s, followed by Australia. They continue to be heavy users. But from the end of the Uruguay Round in the mid-1990s, other users began to emerge, and developing and emerging economies now constitute the majority of users”.