Lobby

Lobbying for anti-dumping measures: Evidence from the European Union1
Christian Bjørnskov, Philipp Meinen, Jørgen Ulff-Møller Nielsen and Philipp J.H. Schröder Aarhus School of Business, Aarhus University ALSO FOR THE REVIEW OF INTERNATIONAL ORGANIZATIONS This version: September 30, 2009
Abstract: While many trade barriers have been reduced in recent years, contingency trade policy barriershave tended to take their place in many countries. Anti-dumping measures can be legitimate protection against predatory pricing but often constitute important trade barriers. Consequently, some industries lobby for such measures when facing particularly competitive foreign firms. Previous literature has followed Olson’s (1965) argument that small industries are likely to succeed in lobbying as theycan overcome free-rider problems and coordination costs, and that particularly vocal actors may exert more influence. However, the characteristics of the politicians lobbying and being lobbied are often ignored. In this paper, we focus on the use of anti-dumping measures in the European Union. Our main question is to which extent geographical or political proximity to Brussels, the politicalcentre of the EU, makes anti-dumping petitions more or less likely to succeed? We provide a tentative answer to the question by estimating a set of determinants of the probability of success in anti-dumping petitions, and the subsequent value of the anti-dumping measures implemented. Our results suggest that being geographical distant to Brussels does make the success of anti-dumping petitions moreprobable. On the other hand, the results suggest that being ideologically distant to the country chairing the EU Council of Ministers at the time of decision reduces the chances of approval an anti-dumping petition. We also note that some of these differences arise rather late on the consultation and decision process. We therefore conclude the paper by discussing the potential institutionalexplanation for our findings. Keywords: Anti-dumping, Trade policy, Public choice JEL Classification: D78, F13

Keywords: Anti-dumping, Trade policy, Public choice JEL Classification: D78, F13
1 Department

of Economics, Hermodsvej 22, DK-8230 Åbyhøj, Denmark. E-mails: chbj@asb.dk (Bjørnskov),

philippmeinen@gmx.de (Meinen), jum@asb.dk (Nielsen) and psc@asb.dk (Schröder). We thank participantsat a joint ASBUniversity of Kiel event in December 2008 and the European Trade Study Group conference in Rome, September 2009, for useful comments. All remaining errors are ours.

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1. Introduction While the world rid itself of a number of trade barriers in the post-war period, contingency trade policy barriers have tended to take their place in many countries (Anderson and Schmitt, 2003;Prusa, 2005). Although anti-dumping measures, i.e. temporary tariffs and other barriers to trade directed against imports from countries that are allegedly selling at below the home market price, of course can be legitimate protection against predatory pricing in some cases, they often constitute important trade barriers. It is therefore not surprising to note that some industries lobby quite hardfor such measures to be implemented when they face rising imports from particularly competitive foreign firms. However, it remains an open question why some firms and industries decide to lobby for such protection, and why some succeed and others do not. The seminal theoretical contributions to the literature on the political economy of trade policy by Hillman (1982) and Grossman and Helpman(1994) suggest that success or failure depend on the size of campaign contributions (or outright bribes) an industry can collude around raising and distributing to key political actors. The seminal empirical contribution to the literature by Finger et al. (1982) confirms political variables to have impact for administered protection in the US. Tharakan and Waelbroeck (1994) confirm this result for...