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Dumping and injury margins in markets with horizontal as well as vertical product differentiation

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This paper examines the GATT/WTO rules for anti-dumping measures in a duopoly model with both horizontal and vertical product differentiation. The GATT/WTO rules allow for anti-dumping measures if domestic producers, exposed to price discrimination, also demonstrate injury where price-undercutting is an important indicator of the latter. The paper shows that the procedure for calculating injury is flawed due to negligence of quality differences in the calculation of the margin of price-undercutting. This gives countries with high-quality producers an option to practice protectionism. This asymmetry between countries in ability to implement anti-dumping measures predominantly favors the developed countries which are specialized in producing high-quality products. The paper suggests an overall critical look at the lenient rules for implementing anti-dumping measures-especially the rules for injury determination-in order to restrict the use of such measures to a minimum and to move the world economy closer to free trade.
Original languageEnglish
JournalJournal of Industry, Competition and Trade
Volume9
Issue3
Pages (from-to)233-250
Number of pages18
ISSN1566-1679
DOIs
Publication statusPublished - 2009

    Research areas

  • Formal and real injury margins, Reciprocal dumping, Horizontal product differentiation, Market integration, Vertical product differentiation

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