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Industry level petitioning for import relief
1. Industry Level Petitioning for
Import Relief: Why do some
industries petition for
antidumping duty while others
don’t?
Nisha Malhotra
2. • Dumping- selling a product in the US at a price
lower than those prevailing in the exporter’s
home market or at a price lower than the cost of
production.
• Antidumping law-Designed to help domestic
firms or industries injured by unfair imports.
– Under the GATT article VI countries can impose
duties on imports from a particular country or
countries to protect domestic industries against
dumped imports
3. US Antidumping Procedure
– An AD procedure can be initiated by a firm or an
industry by filing an import-relief petition with the
International Trade Commission (ITC) and the
International Trade Administration (IA, under the US
Dept. of Commerce)
– IA determines whether and to what extent dumping is
occurring.
– ITC determines whether there is material injury to the
domestic industry due to dumped products.
– In case both, the IA and the ITC make affirmative
findings of dumping and injury, an AD duty equivalent
to the dumping margin is imposed on imports of that
product.
4. Petitioning Process
An injured party in it’s petition has to provide the following information
• Petitioner- extent of their involvement
• year in which production began, range of products they produce, extent of
investment etc.
• Domestic Industry- identify other non petitioning US producers
• Size and location of production facilities
• To show material injury
• Production, capacity, domestic sales and end of period inventories,
employment, and recent investment.
• Imported product-
• Quantity and value of imports, the price difference between the imported
good & US produced good
• Importing Country or Countries, contact information of the foreign
manufacturers, producers and exporters.
• Evidence of dumping by reporting sales price in the foreign country or the
third country market.
5. Existing Literature
• Finger(1981): Aggregates data by 3 digit SITC, (1975-1979)
• OLS: Percentage of imports under investigation
• Herander and Shwartz (1984): 4 digit SIC, (1976-1981)
• OLS: Percentage of imports under investigation
• Hansen (1990): 4 digit SIC, (1975-1984)
• Nested Logit : Binary variable, one if industry petitioned and zero
otherwise
• Tan and Lichtenberg (1994): 4 digit SIC, (1958-1985)
• Poisson and Logit
• Krupp (1994): 4 digit SIC, 1976-1988, Chemical Industry only
• Poisson
6. Data
– Panel data set for the Manufacturing industry, the data set
covers 450, 4-digit SIC groups in the manufacturing industries
for the period 1979 through 1994.
DATA SOURCE
1 Antidumping Data
2 The data converted from SIC 87 classification to SIC 72
using concordances provided by Jon Haveman.
3 Industry level Data: Constructed by Eric Bartelsman and
Wayne Gray database, BLS and BEA.
4 Import Prices- Bureau of Labor Statistics.
7. DATA - Statistics
• Panel data set for the Manufacturing industry: 450, 4-digit SIC groups in the
manufacturing industries for the period 1979 - 1994.
Number of Petitions by Industries (1979-1995)
19
0
21 13
0 2 11 2
101
0 10 0
34
307
70 67
30 21 14 11
0
50
100
150
200
250
300
350
20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39
2 Digit SIC Industries
No.ofPetitions
33-Primary Metal Industries
331-Blast Furnaces, Steel Works, and Rolling and
Finishing Mills(273)
28-Chemicals and allied products
21:Tobacco products
24:Lumber and wood products
29:Petroleum and coal products
31:Leather and leather products
8. Variables
Variables
• Import share = Value of imports/domestic consumption
Domestic consumption = Value of shipment - Exports + Imports
• K/L = Real Capital Stock / Number of Production workers
• TFP5 = percentage increase in gross output less the percentage increase in
(weighted) inputs.
Inputs: Capital, Production workers, non-prod. Workers, Energy, Other
material inputs
• Labor Productivity = Value of Shipment / Number of Production Worker
Hours (hrs.)
• Lag Investment = New capital spending
• Value added = Value of shipment – material cost + change in finished
goods and work-in-process inventories during the year
• Plant = Real structures capital stock
• Chg. Employment= percentage change in employment
9. Differences in Mean for Petitioning Vs. Non
Petitioning Industries
NP P DIF
Variables Average Average Average
Import Penetration 0.13 0.16 0.19***
Average Wage 19.05 21.48 0.11***
Employment 32.69 62.08 0.47***
vship 4338 9939 0.56
Value added 1976 4545 0.57***
Capital 1798.98 5338.03 0.66***
plant 749.12 2067.55 0.64
Total factor productivity 0.99 1 -0.005
Export 348.61 1187.16 0.71***
Change in imports 0.27 0.14 -1.01
Import 421.13 1766.55 0.76***
Unionization 25.46 27.15 0.06***
eprdun 34.01 36.77 0.08
Capital/Labor 103.08 147.76 0.3***
Tariff rate 6.03 5.29 -0.14***
Columns report mean value for all the variables; Dif: Percentage difference between petitioning and non petitioning Industries [(P-NP)/P]
Average: Average of means over the entire period 1979-1995
“t” test is used to check for differences in mean
***significant at 1%, ** significant at 5%, * significant at 10%
11. Differs from Earlier Work
Procedure
• literature lacks a study of the petitioning process for the
later years - Drastic increase in Petitioning activity after
1979- mainly due to the change in Antidumping regime
• Improving on the Poisson regression by using Negative
binomial form
Poisson: events are independent. When an event occurs it
does not affect the probability of the event occurring in the
future.
• This paper differs from other papers in that it looks at the
decision to petition rather than the import coverage of
antidumping cases petitions
