The Trade Effects of Antidumping Duties: Evidence from the 2004 EU Enlargement

With over 1,600 measures in force in 2017, antidumping (AD) duties constitute a frequently used trade defence instrument. Theory predicts that, unlike normal tariffs, AD duties raise producer prices. However, empirical evidence remains inconclusive. This paper exploits the EU enlargement of 2004 as a natural experiment. Following their accession to the EU, the new member states inherited the Union’s AD duties. Under plausible assumptions, these duties are exogenous to new members’ trade shocks. In line with theoretical considerations, the paper shows that AD duties raise producer prices, but only for imports originating from countries with Market Economy Status (MES). Import prices from non-MES countries remain unchanged, while quantities fall by more. Furthermore, this paper presents evidence that the trade dampening effects of AD persist over time and that duties also indirectly affect non-targeted exporters.