Anti-dumping Policy: Protectionism or Consumer Welfare?

Anti-dumping policy is commonly understood as a measure of protection for the domestic industry. In this case study, we have shown that anti-dumping policy can never be regarded as a protectionist measure but only as an instrument that provides remedy to the domestic industry against the injury caused by the unfair trade practice of dumping. It is seen in this study that when domestic producers initiated anti-dumping cases, it did not offer them protection but only led to trade diversion with new import sources replacing named countries and thereby reducing the effect of anti-dumping duties. These definitive dumping duties, apart from giving rise to trade diversion, have lead to an upward price revision in the domestic market with the consumers being the ultimate casualty, by way of welfare loss. This study shows that it is often at the cost of consumer welfare that producers seek protection through the anti-dumping instrument.