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an exporter is dumping potatoes in the economy. Given the following scenarios, rank
each from best to worst in terms of the importing country’s welfare. Explain.
i. Free trade
ii, Foreign dumping
iii. Foreign dumping with an antidumping duty
iv. Coordination between the foreign and domestic producers after the antidumping
petition is withdrawn
Answer: ii > iii > i > iv. Foreign dumping is the best in terms of the importing
country’s welfare because it decreases the price consumers pay. Moreover, the gain in
4. The following figure shows the top 10 countries cited in antidumping cases by the
United States from 1980 to 2004. Is there a relationship between the frequency of
being cited in an antidumping case and the volume of U.S. imports from a country?
Top 10 Suppliers of U.S. Imports in 2004
Rank Country
1 Canada
7 South Korea
8 Taiwan
Data from: U.S. Department of Commerce, International Trade Administration, Table 11,
2006.
Answer: With the exception of the United Kingdom and Malaysia, the top 10
5. The following table provides data on antidumping investigations in the United States
from 1980 to 2004. Does the information indicate that it is relatively easy to obtain
import protection through an antidumping case? Explain. Why do petitioning firms
withdraw their claims before a decision is made?
Antidumping Investigations, 1980–2008
Number
%
Withdrawn before DOC
determination
63
5
DOC determination
Affirmative
876
82
Negative
193
18
Total
1,069
100
Withdrawn after affirmative
153
14
Number
%
DOC determination but before
ITC determination
ITC determination
Affirmative
461
67
Negative
230
33
Total
691
100
DOC = Department of Commerce; ITC = International Trade Commission.
Data from: U.S. ITC, “Import Injury Investigations Case Statistics (FY 1980–2008),”
Table 3, 2010.
Answer: The data indicate that from 1980 to 2008, 82% of the 1,069 cases filed
received an affirmative determination from the DOC. The percentage of cases voted
6. Refer to “Application: U.S. Imports of Japanese Automobiles” in answering the
following questions:
a. Why did the UAW and Ford Motor Company fail to receive protection from
foreign competition from the ITC?
Answer: To receive protection under Article XIX of GATT and Section 201 of
U.S. trade laws, the UAW and Ford Motor Company must have suffered serious
b. What is the impact on American consumers due to the VER imposed by Japan’s
Ministry of International Trade and Industry (MITI) to limit the number of
Japanese cars exported to the United States? More specifically, how did the VER
affect prices and quality of the foreign and domestic cars?
Answer: The VER limited foreign competition, which raised the price of
7. Determine the net impact on Home’s welfare when it imposes a tariff of $2 on the
Foreign monopolist using the following figure.
Answer: With a tariff of $2 per unit, the Foreign monopolist sets MR = MCt so that
price equals $11, while the quantity supplied is 7.
area c = 7 · (11 – 10) area e = 7 · (10 – 9)
8. Name the U.S. government agencies and their roles in determining whether to apply
antidumping or countervailing duties on foreign firms.
Answer: The International Trade Commission (ITC) and the U.S. Department of
Commerce (DOC) are responsible for conducting antidumping and countervailing
9. How is the amount of the antidumping duty determined?
Answer: The amount of an antidumping duty is the difference between the Foreign
10. Who may petition for relief from foreign dumping in the United States?
11. Name the countries that have filed antidumping claims against the United States. You
can find this information by going to the website of the U.S. Department of
Commerce International Trade Administration at the following link
(http://ia.ita.doc.gov/trcs/foreignadcvd/index.html) and clicking on “Case Archives.”
Answer: The list of countries as of June 21, 2016, is as follows:
12. Refer to Problem 11. Examine the Chinese import of acidic acid acrylates from the
on C for case tables next to China PRC.
What other countries did China claim were dumping acidic acid acrylates? When did
China initiate the antidumping duty petition? What was the final decision? Was a
duty applied? If so, how much? What is the current status of the antidumping duty?
Answer:
Product
Initiation
Provisional
Measures
Final Measures
Notes
Acidic acid
acrylates (AD
Measure)
November 10, 2008
(Investigation)
June 26, 2009
5.7%–35.4%
November 1,
2009 5%–35.4%
Respondent nations: United
States, EU, South Korea
13. Refer to Problem 11. Examine India’s import of phenol from the United States. What
other countries did India claim were dumping phenol? When did India initiate the
antidumping duty petition? What was the final decision? Was a duty applied? If so,
how much? What is the current status of the antidumping duty?
Answer: These are the data as of June 21, 2016.
Product
Initiation
Provisional
Measures
Final Measures
Notes
Phenol
May 7, 2013
March 5, 2014
$146.09/MT
USD
August 6, 2014
2014
Respondent Nations:
effective from date of
14. With regard to Fresh Tomatoes from Mexico: Suspension Agreement
(http://ia.ita.doc.gov/tomato/), the ITA states that
“. . . on December 4, 2002, the Department of Commerce and producers/exporters
accounting for substantially all imports of fresh tomatoes from Mexico signed this
agreement suspending the antidumping investigation on fresh tomatoes from Mexico.
The basis for the agreement was a commitment by each signatory producer/exporter
to sell the subject merchandise at or above the reference price, which will eliminate
completely the injurious effects of exports of fresh tomatoes to the United States. ”
Pursuant to Section IV.G. of the 2002 Suspension Agreement, the DOC has
conducted an analysis of the reference prices. Effective November 1, 2003, the
reference price below which signatories to the agreement may not sell fresh tomatoes
from Mexico in the United States during the winter season (October 23–June 30) will
be $0.2169/lb. The reference price for the summer season (July 1–October 22) will
remain at $0.172/lb.
Who will gain from this agreement? Who will lose from this agreement? Explain.
15. Why is the equilibrium quantity and price the same with a home monopoly and
perfect competition under free trade?
