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WTO's anti-dumping rule and the protection of incumbents

Dulleck, Uwe (2003) WTO's anti-dumping rule and the protection of incumbents. Journal of International Trade and Economic Development, 14(2), pp. 229-239.

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Abstract

Article VI of the GATT allows counter measures if goods are sold on a foreign market at a price below average production plus transportation costs. The present article analyzes Article VI based on a simple game theoretic model with two countries and economies of scale in the production of one homogeneous good. It is shown that multiple equilibria exist under the WTO rule for some parameter values which do not exist without the rule. In some equilibria the incumbent serves the entire market even if the entrant can produce at lower costs. The model supports the criticism of the anti-dumping rule as an instrument of protection by industrialized countries against competition from developing countries.

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ID Code: 8574
Item Type: Journal Article
Additional Information: For more information, please refer to the journal's website (see hypertext link) or contact the author. Author contact details: uwe.dulleck@qut.edu.au
Keywords: WTO/GATT Article VI
DOI: 10.1080/09638190500093471
ISSN: 1469-9559
Subjects: Australian and New Zealand Standard Research Classification > ECONOMICS (140000)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Copyright Owner: Copyright 2003 Taylor & Francis
Deposited On: 12 Jul 2007
Last Modified: 29 Feb 2012 23:27

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