Introduction

Recent years have seen the widespread use of anti-dumping (AD) measures by World Trade Organisation (WTO) members. But the most striking development in this field is the swift proliferation of the users of such measures. By the late 1990s, the exclusiveness of the club of traditional AD users had become an anachronism. The developing countries are now initiating about half of the total number of AD cases. As foreseen by Messerlin and Reed (1995) the realisation is beginning to dawn on the traditional users of AD measures that contingent protection is a game that any WTO member can play. This new development has given greater weight to the traditional concern that AD practice is a form of backdoor protectionism, which is eroding the hard-won gains of multilateral trade liberalisation.

Various factors have contributed to the above-mentioned concern. They are not limited to the fact that AD regulations (both at WTO and national level) and practices contain considerable ambiguity (see below). At the more fundamental level, the notion of ‘dumping’ as defined in the WTO, and the corresponding national regulations, are of questionable validity from an economic point of view. But economists do agree that certain types of dumping can indeed be welfare-reducing. The most important among them is predatory pricing.