Antidumping duties against China: analyzing the effect of China's accession to the World Trade Organization Open Access

Choi, Woo Young (2014)

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The authorized use of protectionist measures--especially antidumping duties--by World Trade Organization (WTO) member states has been a controversial issue. Despite the "rules-oriented" scholars' claim for deterrence in protectionist practices among WTO members, application of discriminatory antidumping duties against China has increased since China joined the WTO in 2001. This paper examines China's trading partners' use of antidumping actions against China and addresses the conditions under which regulatory authorities impose affirmative rulings against Chinese firms. Adopting the "rules-oriented" perspective on the effect of international law and the economic model of the market power theory, this study predicts that without the WTO, states are less likely to impose positive antidumping rulings on cases where China has market power in order to decrease their odds of being retaliated against by China. However, upon China's accession to the WTO, the trade regime weakens the deterrent impact of China's market power, leveling the playing field for all members to rightfully exercise their allowable forms of trade protection. To test this argument, a probit regression analysis was employed with multiple variables addressing potential causes for the rise in positive antidumping rulings. The findings of this study support the hypothesis that states will make final antidumping decisions based on the target's market power, but when both investigating and target states are in the WTO, the deterrent impact of market power is reduced. The most important contribution this paper makes is that it shows that international law can be especially valuable to members without market power. Instead of functioning as a guise for the most powerful states to have their way, international law helps level the playing field for states lacking the capacity to retaliate. One important implication is that developing countries that lack market power would benefit more from the WTO if they have full legal capacity.

Table of Contents

Table of Contents

Introduction 1

Background 4

Theory 10

Research Design 16

Results 21

Conclusion and Implication 26

Appendices 28

Works Cited 32

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