<!-- Start of picture text --> Policy, Research, and External Affairs<br>Trade Policy<br>WPS 551<br>This paper - a product of the Trade- Policy Division, Country Economics Department - is part of a larger effort in PRE to<br>understand the economics of the emergence of "faimess" as a standard for regulating intemational trade, its implications for the<br>continued openness of the intemational trading system, and its continued functioning as an important vehicle for development.<br>Copies are available free from the WorldBank. 1818 H StreetNW, Washington DC 20433. Pleasecontact Nellie Artis, room N10-<br>013, extension 37947 (58 pages. with figures and tables).<br>One side of the debate on antidumping argues that dumping process in Australia. In particuiar it has tightened up on<br>is not a problem in intemational trade - that it is a normal how the injury test is implemented and has given a second<br>business practice that benefits the importing country's pass at "normal value" arithmetic. Several times its<br>consumers and user industries - and that antidumping is assessments have diffcred from those of Customs - in a<br>inherently protectionist. direction more sympathetic to the foreign importer. But<br>The other side argues that an anti-dumping system has that may have more to do with the govenmment's current<br>a legitimate role to play in maintaining a liberal trading attitude than with the institutional innovation itself.<br>order, but that the process is being abused for protectionist The ADA operates within the same industry-specific<br>ends. framework as the Customs Service but is more attuned to<br>Gary Banks uses Australia's experience in the last the political environment in which technical decisions are<br>decade to shine light on the issue. made. But that can cut both ways.<br>Antidumping is a complex process with many rules The antidumping system retains a degree of adminis-<br>that, depending on interpretation or minor changes, can trative or ministerial discretion that will always make it<br>have important effects on the fortunes of home industries. vulnerable to the business and political cycles. That is true<br>This means that the system and how it operates will remain whatever the country. The Australian government has at<br>of abiding interest to import-competing industries. Lobby- least wrestled publicly with the issues to arrive at a more<br>ing for rule changes or favorable interpretations will precise, objective position.<br>continue as long as the expected retums from such lobbying But on the three touchstones of the antidumping<br>-<br>exceed the costs. Whether or not antidumping serves as a process defrnitions of normal values, material injury, and<br>-<br>protectionist device in Australia, says Banks, industry sees causality arbitrary judgments will always need to be<br>it in that role. made at many points. These judgments will inevitably be<br>It is difficult for industries to get the conventional colored by the political and economic climate of the day.<br>border protection that was common 10 years ago. Under Compared with the early 1 980s, says Banks, that climate is<br>trade liberalization, "protection" has become a discredited currently relatively "dry" - but that can change again.<br>concept in Australia. But in the United States and else- The evidence from Australia's experience, says Banks,<br>-<br>where, "faimess" is always popular and antidumping suggests that dumping may be a problem in intemational<br>(the very term) is seen as being about achieving faimess. trade but that antidumping presents even greater problems.<br>It is the "low-track" route for getting protection against Tinkering with the procedures and criteria for taking<br>imports. It takes place according to rules and procedures antidumping action can help reduce its protectionist<br>that industry and specialist consultants soon master, away tendencies somewhat (though such changes are reversible).<br>from the public glare. More "high-track" routes are more But it does not resolve the fundamental problem that<br>costly and more likely to meet persuasive opposition. antidumping is at heart about safeguarding the interests of<br>The demand for antidumping as a protectionist device particular industries. As long as this remains the objective,<br>will continue and can be expected to rise when times "get there will always be tension between antidumping policy<br>tough," says Banks. and the broader interests of the national economy and the<br>Australia's new Anti-Dumping Authority (ADA) has world trading system.<br>brought a fresh and more critical eye to the antidumping<br><!-- End of picture text --> The PRE Working Paper Series disseminates the findings of work under way in the Bank's Policy, Research, and Extemal Affairs Complex. An objective of theseries is to get these findings out quickly, even if presentations are less than fully polished. The findings, interpretations, and conclusions in these papers do not necessarily represent official Bank policy.

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