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Antidumping Action in the United States and Around the World: An Update June 2001

Before the Uruguay Round agreement went into effect on January 1, 1995, antidumping duties typically were large enough and long enough in duration to be substantial impediments to trade in the goods on which they were imposed. Moreover, duties imposed by the United States were typically higher and longer lasting than those of most other countries. Average U.S. initial duty rates had been trending upward since the early 1980s, and the average for the 1990-1994 period was 56.2 percent. The few countries whose average initial rates were higher than that of the United States were not heavy users of antidumping laws. Indeed, the large users all had lower average rates, but even their rates were high enough to be significant impediments to trade. U.S. duties generally lasted longer than those of all other countries--long enough to be effectively permanent for all practical purposes.

After the agreement went into effect, the average (mean) U.S. initial duty rate declined, and the United States dropped to 10th among countries ranked by that indicator. Nevertheless, the U.S. average rate for the 1995-1999 period of 47.6 percent was still a sizable barrier to trade. On December 31, 1999, the mean and median durations to date of active U.S. duty orders were even longer than they had been five years earlier and longer than those of any other country. The following day, the large number of sunset terminations reduced the mean and median to points that would have ranked the United States first in terms of the mean and second in terms of the median on the previous day. Both the mean and the median remained higher on that day than on December 31, 1994, the day before the agreement went into effect.
 

HOW LARGE ARE ANTIDUMPING DUTIES?

From 1990 through 1994, before the Uruguay Round agreement became effective, antidumping duty rates--especially those imposed by the United States and a few small, mostly developing countries--were quite high (see Figure 4 and Table B-4). The countries with the highest mean rates imposed from 1990 through 1994 were Mexico, at 126.0 percent; the United States, at 56.2 percent; Colombia, at 51.3 percent; South Korea, at 36.9 percent; and Canada, at 34.0 percent. The mean initial duty rates of all of the heaviest users of antidumping laws except Mexico were substantially lower than that of the United States: Canada's rate, as noted above, was 34.0 percent; the European Community/Union's rate was 31.0 percent; and Australia's rate was 24.6 percent. Nevertheless, even those rates are high enough to constitute major hindrances to trade.⁽¹⁾
 

FIGURE 4. RANKING OF COUNTRIES BY MEAN INITIAL DUTY RATE IMPOSED (In percent)

SOURCE: Congressional Budget Office based on the GATT/WTO data set.

NOTES: Further details and notes are given in Table B-4.

EC/U = the European Community/Union. (The European Community, which was established in 1979, became the European Union on November 1, 1993.)

a. Two of the duties for Venezuela from 1995 through 1999 were reported as 100 percent plus US $1.46 per unit. The average plotted here was calculated without the $1.46 per unit, so the true average is higher by an unknown percentage.

Looking at medians rather than means does not significantly change the picture (see Figure 5 and Table B-4). The countries with the highest median initial duty rates from 1990 through 1994 were Colombia, at 56.3 percent; Mexico, at 49.9 percent; the United States, at 37.9 percent; South Korea, at 35.9 percent; Canada, at 32.6 percent; and Thailand, at 30.0 percent. Again with the exception of Mexico, the heaviest users of antidumping laws all had lower median duty rates than did the United States: Canada's rate was 32.6 percent, the EC/U's was 22.0 percent, and Australia's was 20.0 percent.
 

FIGURE 5. RANKING OF COUNTRIES BY MEDIAN INITIAL DUTY RATE IMPOSED (In percent)

SOURCE: Congressional Budget Office based on the GATT/WTO data set.

NOTES: Further details and notes are given in Table B-4.

EC/U = the European Community/Union. (The European Community, which was established in 1979, became the European Union on November 1, 1993.)

a. Two of the duties for Venezuela from 1995 through 1999 were reported as 100 percent plus US $1.46 per unit. The average plotted here was calculated without the $1.46 per unit, so the true average is higher by an unknown percentage.

In the five years since the Uruguay Round agreement went into effect, U.S. initial duty rates have been somewhat lower than they were before, and the United States is no longer among the countries with the highest rates. Nevertheless, its rates still hinder trade significantly. The countries with the highest mean initial duty rates from 1995 through 1999 were Trinidad and Tobago, at 260.0 percent, although in just one case; Guatemala, at 89.5 percent, also in just one case; Argentina, at 84.8 percent; Colombia, at 62.1 percent; and Australia, at 59.3 percent. The United States ranked 10th, at 47.6 percent, which despite the substantial decline in the U.S. ranking was only a moderate reduction from the mean of 56.2 percent five years earlier. Among the most frequent users of antidumping law, Argentina, at 84.8 percent; Mexico, at 59.1 percent; and Brazil, at 53.2 percent, all had mean initial duty rates higher than that of the United States. Only South Africa, at 45.2 percent; Canada, at 44.7 percent; and the EC/U, at 27.7 percent, were lower. (Australia, which was one of the heaviest users five years earlier, imposed substantially fewer measures from 1995 to 1999.) The pattern for median rates of initial duties is similar.

The rates imposed by the United States increased dramatically from 1980 through 1994, but they have declined somewhat since then (see Table 3). The decline has nevertheless left the mean and median higher than they were before 1990. The use of five-year intervals for averages masks considerable fluctuation in the rates that the United States has imposed. Considering three-year intervals reveals the same general pattern but with significant extraneous variation over time (especially in the median rates).⁽²⁾
 

The mean duty rates given in this section are straight, unweighted averages, not trade-weighted averages (which give greater weight to duties that affect large quantities of trade). Unweighted averages are better indicators of the tendencies and propensities of the antidumping laws, procedures, and administrative authorities than of effects on the U.S. economy. Although trade-weighted averages would be better indicators of the latter, they have problems of their own, and the GATT/WTO reports do not give sufficient information to calculate them. (See the note to Table B-4 for more details.)
 

HOW LONG DO ANTIDUMPING MEASURES LAST?

Before the Uruguay Round agreement went into effect, foreign exporters generally found it difficult to get U.S. antidumping orders against them removed, and with no provision for sunset reviews and terminations, U.S. orders usually stayed in place long enough to be effectively permanent. Statistics derived from the GATT/WTO data set show several things: the measures imposed by other countries were not particularly short-lived; the measures imposed by the United States lasted much longer than those imposed by other countries; and a large fraction of U.S. measures were, indeed, effectively permanent. Because the sunset review and termination provision of the Uruguay Round agreement did not take effect immediately, the average duration to date of U.S. measures continued to increase until January 1, 2000. On that date, the sunset terminations became effective and U.S. averages dropped. Both the mean and median durations for the United States remained longer than they were before the agreement, however, and the United States continued to have the longest mean and the second-longest median durations to date. (Once again, the averages are unweighted, not trade weighted.)

Active Measures on December 31, 1994

Before the agreement, durations to date of U.S. antidumping measures were significantly longer than the durations of all other reporting countries' measures. The mean duration to date of active U.S. antidumping measures on December 31, 1994, was 7.3 years; the median was 7.0 years (see Figures 6 and 7 and Table B-6). More than one in five U.S. measures had been in effect for 10 or more years. More than one in nine had been in effect for 15 or more years, and one measure had been in effect for more than 28 years. For second-place Canada (ranking by means), the mean was only 4.9 years and the median was only 3.4 years. For the third-place EC/U, the mean and median were 3.9 years and 3.5 years, respectively, and for fourth-place New Zealand, they were 3.8 years and 3.1 years.
 

FIGURE 6. RANKING OF COUNTRIES BY MEAN DURATION TO DATE OF ACTIVE ANTIDUMPING MEASURES (In years)

SOURCE: Congressional Budget Office based on the GATT/WTO data set.

NOTE: Further details and notes are given in Tables B-6 and B-7.

EC/U = the European Community/Union. (The European Community, which was established in 1979, became the European Union on November 1, 1993.)

a. The Uruguay Round agreement adopted by the United States at the end of 1994 requires periodic sunset reviews and terminations of active antidumping measures. The deadline for the United States to complete those reviews and any required terminations of measures in place when it adopted the agreement was January 1, 2000, at which time the United States consequently terminated a large number of measures. The terminations affect the number of active measures and the mean and median durations to date of active measures. The values of the number, mean, and median on January 1, 2000, are more reflective of U.S. policy after the agreement than are the values on the day before. CBO did not have the necessary data to update other countries by that one day. However, most of them already had policies of conducting sunset reviews and terminations before the Uruguay Round agreement, so it is unlikely that other countries terminated many measures on that date.

FIGURE 7. RANKING OF COUNTRIES BY MEDIAN DURATION TO DATE OF ACTIVE ANTIDUMPING MEASURES (In years)

SOURCE: Congressional Budget Office based on the GATT/WTO data set.

NOTES: Further details and notes are given in Tables B-6 and B-7.

EC/U = the European Community/Union. (The European Community, which was established in 1979, became the European Union on November 1, 1993.)

a. The Uruguay Round agreement adopted by the United States at the end of 1994 requires periodic sunset reviews and terminations of active antidumping measures. The deadline for the United States to complete those reviews and any required terminations of measures in place when it adopted the agreement was January 1, 2000, at which time the United States consequently terminated a large number of measures. The terminations affect the number of active measures and the mean and median durations to date of active measures. The values of the number, mean, and median on January 1, 2000, are more reflective of U.S. policy after the agreement than are the values on the day before. CBO did not have the necessary data to update other countries by that one day. However, most of them already had policies of conducting sunset reviews and terminations before the Uruguay Round agreement, so it is unlikely that other countries terminated many measures on that date.

Other countries besides the United States had some very long-lived measures: one Canadian measure had been in effect almost 20 years, and an EC/U measure had been in effect more than 13 years. However, the United States and Canada were alone in having any measures that had been in effect 15 or more years, and those two countries plus the EC/U were the only ones with any measures that had been in effect 10 years or more.

As the Congressional Budget Office's 1998 paper noted, duration-to-date statistics such as those given above do not by themselves prove that U.S. measures were more long lasting than those of other countries. They indicate that many antidumping measures were long-lived, but they do not indicate how long measures normally lasted before being terminated since, by definition, the duration to date is the lifetime so far of a measure that has not yet been terminated. A given country with shorter mean and median durations to date than those of the United States might have enacted a large number of measures very recently (perhaps because it had just lately begun enforcing antidumping laws or because a flood of imports had just come in as a result of exchange rate fluctuations). Those measures could end up lasting as long as the U.S. measures, but in the meantime, they would lower the average durations of active orders for the countries in question. Indeed, CBO's earlier paper indicated that the U.S. median dropped from 6.6 years at the end of 1985 to 3.3 years at the end of 1987 because a large number of new measures were imposed. The median then trended back up over time, reaching 6.6 years by the end of 1995. A similar, although much less pronounced, pattern was evident in the mean.

The earlier paper also showed, however, that the United States' number-one ranking in the duration-to-date numbers for December 31, 1995, was backed up by other measures. For the United States, the mean duration of measures terminated during the period covered by the data set through December 31, 1995, was 9.1 years, and the median was 7.9 years. Four in 10 measures lasted 10 years or more. More than one in six lasted 15 years or more, and one lasted over 31 years. The next highest ranking countries were Canada, the EC/U, Brazil, and Australia, with means of 6.3, 5.6, 5.0, and 4.2 years, respectively. Their respective medians were 5.4, 5.2, 5.0, and 3.6 years, and the longest-lived measures were 15.6, 12.4, 5.0, and 9.6 years.⁽³⁾

CBO's previous paper also derived another statistic--the expected median duration of antidumping measures. The expected median duration is the number of years such that half of all measures first put into effect on a given date by a particular country can be expected to be shorter-lived than the median, and half can be expected to be longer-lived. (The number assumes that future policy on terminating measures is the same as it was over the period covered by the GATT/WTO data set through December 31, 1995.) The expected median duration for U.S. antidumping measures reported in the 1998 paper was 10.6 years, which was considerably longer than the comparable numbers for the other countries for which it was possible to compute the statistic (Canada, at 6.5 years; the EC/U, at 6.3 years; Mexico, at 3.8 years; and Australia, at 3.4 years).

Given the support of the numbers for the average lifetime of a measure at termination and for the expected median duration, one can conclude that although in theory, the duration-to-date numbers might sometimes lead to incorrect conclusions about the relative durations of different countries' measures, in this case that theoretical possibility does not appear to be an actual problem.

Active Measures on December 31, 1999 (January 1, 2000)

On December 31, 1999--five years after the Uruguay Round agreement went into effect and one day before the first sunset terminations occurred--the mean duration of active U.S. measures was 9.7 years, an increase of 2.4 years over the 7.3-year mean on December 31, 1994 (see Figures 6 and 7 and Table B-7). The median duration to date was 8.9 years, an increase of 1.9 years over the median five years earlier. The longest-lived U.S. measure (which was the same one that was noted five years earlier) had now been in effect 33.3 years, which, of course, was an increase of five years.

The United States continued to maintain its number-one ranking based on mean and median durations to date. Following the United States in the ranking by mean were Turkey, Canada, New Zealand, Australia, Mexico, and the EC/U, with mean durations to date of 6.7, 6.3, 6.2, 4.7, 4.5, and 4.4 years, respectively. Following the United States in the ranking by median were New Zealand, Turkey, Australia, Canada, Japan, and Mexico, with median durations to date of 7.3, 7.0, 5.9, 5.6, 4.4, and 4.4 years, respectively.

On January 1, 2000, the large number of sunset terminations caused significant drops in the average durations to date of active U.S. measures. The mean dropped from 9.7 years to 8.2 years, and the median fell from 8.9 years to 7.2 years. Despite those drops, however, the new averages a day earlier would still have ranked the United States number one on the basis of means and number two on the basis of medians.

On December 31, 1999, and January 1, 2000--as was the case five years earlier--only the United States and Canada had active measures that had been in effect for 15 years or longer. Only those two countries plus the EC/U, New Zealand, and South Africa had active measures that had been in effect for 10 years or more.

1. In principle, a small duty could be a substantial impediment to trade in an extremely competitive industry, and a larger duty might not be much of an obstacle if the foreign exporter did not have much competition in the U.S. market. It is not usually the case, however, that foreign exporters have little competition in the United States. Further, duty rates of the magnitude under discussion here would significantly reduce imports of most products even if the foreign exporter had little competition.

2. The mean and median rates of initial duties for the 1979-1981 period (37.7 percent and 37.1 percent, respectively) are substantially higher than the means and medians for the next two three-year periods, which is contrary to the trends. However, the 1979-1981 period has only 11 rates from which to compute the averages, whereas all of the other periods have more than three times that many. The small number of rates means that one or two large rates could have an outsized influence on the average, which is therefore a less reliable indicator than the average of a larger number of rates. See Table B-5 for more statistical details on rates of initial U.S. duties.

3. See Congressional Budget Office, Antidumping Action in the United States and Around the World: An Analysis of International Data, CBO Paper (June 1998), pp. 27-29 and 88 for more details and qualifications.

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