Indian Council for Research on International Economic Relations

Seminar Details

19 Sep 2006

Anti-Dumping and Access Injury Margins in the European Union: A Counter Factual Analysis
by Dr. P.K.M. Tharakan
Tuesday September 19, 2006
Dr. P. K. M. Tharakan, Professor at the University of Nottingham and an advisor on Anti Dumping measures to WTO, gave a talk on “Anti Dumping and Excess Injury Margins in the European Union: A Counter Factual Analysis” which was published in the European Journal of Political Economy in September, 2006. Professor Tharakan talked about the over estimation of domestic injury caused by dumping and the consequent imposition of higher duties by the European Union during 1980-1995. He highlighted the simplistic nature of the method adopted by the European Union and said it failed to give a true picture of the impact of dumping. He sought to correct this inconsistency by applying a counterfactual analysis. The model considers two situations the actual one and the counter factual one. The former takes dumping into account while the latter assumes free trade between the two countries (domestic and exporting). He used data from 354 EU anti dumping cases during this period. Introducing a set of variables such as the market share of the exporter in both the countries, elasticity of demand and elasticity of supply of a similar product in the domestic market and the dumping margin, he generated through iteration the counterfactual injury margin. When compared to the injury margin of the actual situation, this reflected the positive bias in injury determinations by EU. He has proved in his paper that the excess injury margins imposed by EU were a result of distortions in the method of estimation and not due to political economy influences. Professor Tharakan answered questions ranging from how to handle such heavy data requirements in India and to conducting a similar study for the US, which does not follow the lesser duty rule like the European Union.


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