Antidumping as a signaling device under the WTO’s ADA non-disclosure clause

Khatibi, Arastou;Vergote, Wouter
(2018) Review of World Economics — Vol. 154, n° 4, p. 649-673 (2018)

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  • Khatibi, ArastouUCLouvain
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  • Vergote, Wouterorcid-logoUSL-B
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Abstract
Under the WTO Antidumping Agreement (ADA) non-disclosure clause, the investigating AD authority cannot disclose the confdential information it obtains. This paper analyzes how non-disclosure of confdential information leads the government to use the magnitude of the AD duty to signal this information, in casu the costs of the frm under investigation, to the domestic industry. We obtain two main results. First the AD authority sets lower tarifs compared to the full disclosure scenario because it has an incentive to signal that the foreign frm is relatively inefcient. Second, adhering to the non-disclosure clause leads to lower domestic welfare relative to the full disclosure scenario. On the other hand, prices are lower and global welfare is higher under the non-disclosure clause, thus providing an economic rationale for the WTO’s ADA non-disclosure clause.
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Khatibi, A., & Vergote, W. (2018). Antidumping as a signaling device under the WTO’s ADA non-disclosure clause. Review of World Economics, 154(4), 649-673. https://doi.org/10.1007/s10290-018-0318-4 (Original work published 2018)