Evolving Discretionary Practices of U.S Antidumping Activity

Previous literature has discussed the procedural biases that exist in U.S. Department of Commerce (USDOC) dumping margin calculations. This paper examines the evolution of discretionary practices and their role in the rapid increase in average USDOC dumping margins since 1980. Statistical analysis finds that USDOC discretionary practices have played the major role in rising dumping margins. Importantly, the evolving effect of discretionary practices is due not only to increasing use of these practices over time, but apparent changes in implementation of these practices that mean a higher increase in the dumping margin whenever they are applied. While legal changes due to the Uruguay Round are estimated to have reduced the baseline U.S. dumping margin by 20 percentage points, the increasingly punitive discretionary measures used by the USDOC almost completely compensated for this decrease by 2000.

Robust Inference on Seasonal Unit Roots via a Bootstrap Applied to OECD Macroeconomic Series

Recent experimental results presented in Burridge and Taylor (2001a,b, and 2003) show that, as usually implemented, the Hylleberg et al. (1990) seasonal unit root tests can be rather liberal, with true level often substantially higher than nominal level. This effect is due to the presence of any of three things: data-based lag selection in the implementation of the tests, and either or both periodic heteroscedasticity and serial correlation in the driving shocks. Burridge and Taylor (2003) demonstrate that under experimental conditions a carefully implemented bootstrap substantially corrects test level without loss of power. The present study applies their technique to a large number of publicly available series, and demonstrates conclusively that the bootstrap produces less liberal, and, given the experimental results cited above, more reliable inference. We report results for Sweden, the UK and the US, which are typical of the fifteen countries in our panel. Other results, the GAUSS code, and raw data are all available at: www.staff.city.ac.uk/p.burridge

U.S. Multinational Services Companies: Effects of Foreign Affiliate Activity on U.S. Employment

This working paper examines the effect that U.S. services firms’ establishment abroad has on domestic employment. Whereas many papers have explored the employment effects of foreign direct investment in manufacturing, few have explored the effects of services investment. We find that services multinationals’ activities abroad increase U.S. employment by promoting intrafirm exports from parent firms to their foreign affiliates. These exports support jobs at the parents’ headquarters and throughout their U.S. supply chains. Our findings are principally based on economic research and econometric analysis performed by Commission staff, services trade and investment data published by the Bureau of Economic Analysis, and employment data collected by the Bureau of Labor Statistics. In the aggregate, we find that services activities abroad support nearly 700,000 U.S. jobs. Case studies of U.S. multinationals in the banking, computer, logistics, and retail industries provide the global dimensions of U.S. MNC operations and identify domestic employment effects associated with foreign affiliate activity in each industry

Measuring the export potential of urban regions: A case study from Appalachia, USA

The economic benefits from exporting can be very significant for a region. New research shows U.S. export-related jobs pay 20 percent above the national average, productivity growth is three times the national average, and export-related jobs provide the best long-run security. The Southern Appalachian region of the U.S. provides an excellent case study. It has an economic base rich in the production of agricultural, mining, and manufactured goods which are easily exported. This paper investigates the extent to which the local population is benefiting from exporting of these products. Foreigh trade zones are a special legal status granted to airports, warehouses and manufacturing plants. This status provides a wide range of cost and administrative benefits to firms engaged in international commerce. The U.S. government has recently released two studies on export-related employment and the value of exports originating in metropolitan areas. These data sources will be used to measure the export performance for several MSAs within the Southern Appalachia. Site visits will be done for two MSAs - Tri-Cities, TN-VA and Huntsville, AL. The measures of export potential developed from data provided from the new studies can identify regions where export activity continues to hold signifcant potential or where the current level of exports may be at their maximum. Supplemented by site visits, this preliminary information can be verified or revised. The greatest benefits attached to the operation of an FTZ were found to be indirect rather than associated with the operation of the FTZ itself. The major impact of the FTZ is felt through the creation of a Customs service office and the creation of Subzones. FTZs may hold significant promise for the promotion of export activity in interior cities of Europe as well. This study was recently funded as "An Emerging Issues Paper" by the Appalachian Regional Commission, Washington, D.C.

Tariff-jumping FDI and Domestic Firms' Profits

Studies of the welfare implications of trade policy often do not take account of the potential for tariff-jumping FDI to mitigate positive gains to domestic producers. We use event study methodology to examine the market effects for U.S. domestic firms that petitioned for antidumping (AD) relief, as well as the effect of announcements of FDI by their foreign rivals in the U.S. market on these U.S. petitioning firms. On average, affirmative U.S. AD decisions are associated with 3% abnormal gains to a petitioning firm when there is no tariff-jumping FDI, but no abnormal gains if there is tariff-jumping FDI. The evidence for this mitigating effect is strongest when announcements of the intended tariff-jumping FDI have already occurred before an AD decision takes place, which happened in a fair number of cases. We also find evidence that the announcements of plant expansions (and, to some extent, new plants) have significantly larger negative effects on U.S. domestic firms' profits than other types of FDI, including acquisitions and joint ventures.

Orange Juice Dumping Ruling

The U.S. Department of Commerce and International Trade Administration found that Cutrale, Citrosuco, Montecitrus and other Brazilian firms dumped orange juice in the United States over the period from October 2003 through September 2004. This dumping contributed to a build up of Florida orange juice inventories and resulted in low orange juice prices.dumping, orange juice, Brazil, Agribusiness, International Relations/Trade,

The Southeast U.S.A. Shrimp Industry: Issues Related to Trade and Antidumping Duties

On December 31, 2003 a coalition representing Southeast U.S.A. shrimp harvesters and processors filed a petition with the U.S. International Trade Administration and the U.S. International Trade Commission seeking relief in the form of antidumping duties from what the coalition perceived as unfair trade practices by six countries—China, Vietnam, India, Thailand, Ecuador, and Brazil. After an exhaustive investigation, an affirmative finding of dumping and injury was found, and duties were imposed on subject merchandise from these six countries. This study examines the factors that led to the petition being filed, the investigation process, and the outcome associated with the imposition of antidumping duties. Overall, the study concludes that while the duties resulted in a limited amount of trade deflection, particularly among those countries assessed with higher duties, much of the protective effect that might have been forthcoming from restricting imports from the six named countries was eroded by trade diversion to countries not included in the petition.Antidumping duties, shrimp, trade, United States of America, Environmental Economics and Policy, International Relations/Trade, F13, Q17,

U.S. --MEXICO FOOD SYSTEMS AND THE TOMATO TRADE DISPUTE

Mexican produce exports into the U.S. increased considerably during the latter months of 1995 and the first nine months of 1996. Because of these increased imports, Florida tomato growers requested the executive branch of the U.S. government and Congress to put into effect seven trade protection measures to reduce or stop fresh tomato imports from Mexico. This study was carried out to determine if the United State Department of Commerce (USDOC) and the United States International Trade Commission (USITC) found valid and reliable indications that the tomato industry in the U.S. was materially injured by imports from Mexico.International Relations/Trade,

Competitive Advocacy Opportunity: Zeroing in U.S. Antidumping Enforcement

Almost all countries have antidumping laws which regulate their imports. The United States and other countries enforce these laws within the terms of the World Trade Organization ("WTO"). There is a difference between U.S. enforcement and the enforcement approach of other countries, however. The United States­but not other countries of which I am aware--now uses 'zeroing' in its determination of whether imports are dumped. The use of 'zeroing' will almost always increase the level of any antidumping duty, and will sometimes create a duty where none would have been imposed, had the methodology not been used. All countries test for dumping by attempting to determine whether imports are being sold at less than 'normal' value. Other countries generally do this by directly comparing the average price at which the product is sold in the country of production with the average price at which the same product are sold in the importing market. If the average of the observed prices in the importing country is lower than the average price in the country of production (the 'normal' value), then the foreign firm is said to be dumping. Using zeroing, however, the U.S. treats import price observations above the 'normal' value as if they occurred at the 'normal' value (rather than at their observed level). Transactions at prices below the normal value are treated at their observed levels. The result of zeroing has been to make the U.S. antidumping laws more restrictive than they might appear, with a positive antidumping margin potentially being found if any single transaction occurs below 'normal' value, even if the average of the import prices in the U.S. is much higher than the 'normal' value. The U.S. practice of zeroing has recently been challenged at least six times before the World Trade Organization (WTO), and has generally been found to be inconsistent with the obligations of the United States under the WTO. Many economists feel that the antidumping laws of the U.S., or of any other country, are misguided. Antidumping regulations seem ill suited to play the most likely roles according to which import restrictions might be beneficial: addressing the possibility of predation or strategic trade by foreign firms, or serving as an 'optimal tariff'. Zeroing, therefore, may increase the cost to the U.S. of import protection without any corresponding benefit. The net impact of the zeroing methodology on the United States (compared to antidumping enforcement without zeroing) depends inter alia on the dispersion of the U.S. prices obtained by foreign exporters under dumping investigation by U.S. authorities. One estimate is that the cost of zeroing to the U.S. could be in the range of $46-112 million/year, with the higher end of the range being more likely.Trade, Dumping, Import, Zeroing, United States, WTO

United States - Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany (WTO Doc. WT/DS213/AB/R): The Sounds of Silence

On August 17, 1993, the United States Department of Commerce (USDOC) imposed definitive countervailing duties (CVDs) on carbon steel originating in Germany. The imposition of these duties was based on an investigation by USDOC in which it was determined that certain German producers had benefited from five countervailable subsidy programs at a total ad valorem rate of 0.60 percen