3⁄4 of competition law by the exporting country. These constitute reasons why dumping is held to be an unfair practice. Thus, the U.S. has claimed that lax Japanese antitrust enforcement permits Japanese fifms to collude, raise prices, and use part of the resulting rents to cross-subsidize (dump) products sold on foreign markets. Garten (1994, pp. 11-13) offers a representative and thoughtful defense of antidumping that emphasizes entry barriers in the exporter's home market. Four major conditions are argued most likely to give rise to dumping: dosed home markets of exporters, anti-competitive practices in the exporting country market which permit export sales below cost, government subsidization, and nonmarket conditions (mainly referring to the People's Republic of China and the economies in transition). Garten goes on to defend active application of antidumping laws to address these conditions. Arguing against those who suggest that if lack of competition is the problem, competition laws should be applied, "The Administration supports increased global standards in the area of competition law and believes that, with success in this effort, the need to invoke the antidumping law will be reduced. Competition laws can and do work effectively alongside the antidumping law, _but are not a substitute for it. 11_ ' need for vigorous enforcement of the US antidumping law will continue for the foreseeable future' (Garten, 1994, p. 20, emphasis added). Sole reliance on antitrust measures is rejected: "If the low prices are the result of dumping and the exporter succeeds in driving its US competition out of business, prices could still rise, likely to higher levels than if there had never been dumping" (Ibid.) Garten goes on to argue that another disadvantage of the "sole reliance" on antitrust laws is the questionable effectiveness of the US antitrust laws in "addressing and resolving problems that arise outside the United States and the time-limits chat are not appropriate for cases where urgent need of protection from unfairly traded imports is sought' (Ibid.).

Antidumping is an inferior instrument to address foreign market closure as it does not deal directly with the source of the problem, i.e., the _government_ policies which _artificially_ segment markets, or allow this to occur. An antidumping duty may put pressure on affected firms to lobby their government to eliminate such policies - or to abolish private business practices that restrict entry - but does so in a very indirect manner. Once investigations are initiated, any chahges in policies or practices cannot have an impact on the finding. Thus, the _threat_ of antidumping apparently must induce market opening. But, in many cases there will not be significant barriers to entry, so there is not much to be done by exporters on this dimension. A problem with current antidumping enforcement is that no account is taken of whether price discrimination or selling below cost is the result of market access restrictions. Instead, this is simply assumed.<sup>4</sup> At the same time, antidumping creates a large number of distortions.5 The existence of antidumping induces rent-seeking behavior on the part of import-competing fimns, and 4/ Of course, thece aeed be no uniform relationship between market closure and dumping, as this will depend on a lot of other variables. What matters is that market closure is held to be a justification for antidumping, i.e., is a source of 'unfaimess', without being shown to exist.

5/ This is generally iccognized. For example, "But unlike domestic antitrust laws, which generally increase competition and lower prices, national antidumping laws sometimes reduce competition and raise prices.Economic Report of the President, United States Government Printing Office, Washington D.C., 1994.

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