Lobbying for anti-dumping measures: Does distance from Brussels
Christian Bjørnskov, Philipp Meinen, Jørgen Ulff-Møller Nielsen* and Philipp J.H. Schröder
Department of Economics,
Aarhus School of Business, Aarhus University
Department of Economics, Hermodsvej 22,
DK-8230 Åbyhøj, Denmark.
E-mails: firstname.lastname@example.org (Bjørnskov), email@example.com (Meinen), firstname.lastname@example.org (Nielsen) and email@example.com (Schröder).
This version: August 14, 2009
Abstract: While many trade barriers have been reduced in recent years, contingency trade policy
barriers have tended to take their place in many countries. Anti-dumping measures can be legitimate
protection against predatory pricing but often constitute important trade barriers. Consequently, some
industries lobby for such measures when facing particularly competitive foreign firms. However, it is
obvious that not all lobbying is successful.
Previous literature has followed Olson?s (1965) argument that small industries are likely to
succeed in lobbying as they can overcome free-rider problems and coordination costs, and that
particularly vocal actors may exert more influence. However, the characteristics of the politicians being
lobbied are often ignored.
In this paper, we focus on the use of anti-dumping measures in the European Union. Our main
question is to which extent geographical or political proximity to Brussels, the political centre of the
EU, makes anti-dumping petitions more or less likely to succeed? We provide a tentative answer to the
question by estimating a set of determinants of the probability of success in anti-dumping petitions, and
the subsequent value of the anti-dumping measures implemented.
Our results suggest that being geographical distant to Brussels does make the success of anti-
dumping petitions more probable, but does not influence the level of implemented duties. On the other
hand, the results suggest that being ideologically distant to the country chairing the EU Council of
Ministers at the time of decision reduces the chances of approval an anti-dumping petition, but given
approval rightwing governments chairing the Council increase the chance for a higher level of
Keywords: Anti-dumping, Trade policy, Public choice
JEL Classification: D78, F13
* Corresponding author.
While the world rid itself of a number of trade barriers in the post-war period, contingency trade policy
barriers have tended to take their place in many countries (Anderson and Schmitt, 2003; Prusa, 2005).
Although anti-dumping measures, i.e. temporary tariffs and other barriers to trade directed against
imports from countries that are allegedly selling at below the home market price, of course can be
legitimate protection against predatory pricing in some cases, they often constitute important trade
barriers. It is therefore not surprising to note that some industries lobby quite hard for such measures
to be implemented when they face rising imports from particularly competitive foreign firms.
However, it remains an open question why some firms and industries decide to lobby for such
protection, and why some succeed and others do not. The seminal theoretical contributions to the
literature on the political economy of trade policy by Hillman (1982) and Grossman and Helpman
(1994) suggest that success or failure depend on the size of campaign contributions (or outright bribes)
an industry can collude around raising and distribute to key political actors. The seminal empirical
contribution to the literature by Finger et al. (1982) confirms political variables to have impact for
administered protection in the US. Tharakan and Waelbroeck (1994) confirm this result for anti-
dumping and countervailing duty decisions in the EU.
Olson (1965) made the argument, which much of the literature now rests on, that relatively small
group size is advantageous in influencing endogenous trade policy. In order for a group to be able to
overcome free-rider problems and coordination costs, the potential benefits need to be concentrated
on the group and the costs scattered across society. This situation is more likely the smaller the
economic sector, and the more vocal it is, implying that relatively small coalitions will be more likely to
succeed in getting anti-dumping protection. Therefore concentrated industries and industries with little
apparent economic importance are likely to succeed in lobbying for protection or subsidies. Empirical
studies have, however, failed to find clear relations between industry concentration and policy
effectiveness of an industry (Potters and Sloof, 1996). This may be related to firm heterogeneity at the
industry level for which reasons firms may have different comparative advantages (and interests) of
lobbying for protection (see Hilman, 1991; Long and Souberyan, 1996; Hilman et al., 2001). On the
other hand, politicians might be more responsive to claims made by large economic sectors, politically
sensitive industries or particularly vocal actors. In addition, even in the European Union, on which we
focus in this paper, countries have very different political traditions for government interventions and
economic policy, and the populations hold quite disparate views of the desirability of protecting
domestic interests (see e.g. Scheve and Slaughter, 2001; Mayda and Rodrik, 2005). A priori, it is
impossible to say which of these factors are more or less important, and whether some contribute
significantly to our understanding of the political economy of trade policy. What is important and what
is not is therefore an empirical question.
In this paper, we focus on the use of anti-dumping measures in the European Union. The legal
basis for the European Union anti-dumping policy is provided by the WTO Agreements, which have
been transposed into EU legislation by Council Regulation (EC) No. 384/96 (the basic anti-dumping
regulation). Proceedings are initiated by a complaint from the EU business. The complaint is examined
by an Advisory Committee consisting of representatives of Member States and a representative of the
European Commission as chairman (WTO, 2009).1 If the Advisory Committee finds sufficient
evidence, the Commission initiates a simultaneous investigation of dumping and injury. In case of
dumping and injury the Commission imposes provisional measures and proposes measures for
adoption by the Council of Ministers, who is responsible for definitive measures. According to the
basic anti-dumping regulation, measures can only be implemented if they are not against the general
interest of the EU economy including the interests of consumers, suppliers, users as well as the
complaining industry. The weighting of the different interest is done by the Commission. Measures
including specific and ad valorem duties or voluntary (price) offers given by exporters may be accepted,
but cannot be offered before the provisional duties given by the Commission or after the definitive
duties given by the Council. Measures may not exceed the dumping margin but may be less if such
lesser duty is adequate to remove the injury. Special rules apply to the determination of the dumping
margin in case of imports from “non-market economy countries”. “Non-market economy treatment
normally yields significantly higher duties” (WTO, 2009: 53).
The national interests in EU anti-dumping decisions are expressed in the Advisory Committee
and the Council. There is no voting in the Advisory Committee, but the positions of the national
representatives give the Commission an idea if its proposals will pass through the Council or not. If this
is not the case, the Commission may try to convince opponent members of the Advisory Committee by
offering adjustments in the proposals more in accordance with the their views. Such attempts of
persuasion of members of the Advisory Committee may continue until a majority is in the horizon2.
Before March 2004 a proposal from the Commission for definitive anti-dumping measures
(tariffs) would be adopted in the Council if a simple majority of Member countries voted in favour of
such proposal. Member States, that were absent from Council meetings or abstained from voting,
1 In cases where the Commission and the Advisory Committee find that the industry does not have a case no formal
investigation is opened and these complaints are therefore never reported, but estimated by Kempton (2001) to be between
30-50% of the total number of complaints.
2 In the recent footwear case rumours say that by withdrawing the tariffs on footwear for children the Commission secured
the „yes? from United Kingdom.
counted under this voting system as against the Commission?s proposals. Since the Commission
proposals in a number of situations had not been adopted because of Member States absence, the basic
Regulation was amended in March 2004 (Council Regulation (EC) No. 461/2004), so the requirement
for rejection of a Commission proposal is now a simple majority against of Member States in the
The vote of the individual country in the Council may be determined by the ideology of the
government, some may be pro free trade and others more biased in a protectionist direction. But, since
the Council deals simultaneously in many areas, the individual anti-dumping case may enter as a „piece?
in larger game, for which reason logrolling may take place and ideology may water down. Since each
government acts as president of the Council for six months, each country has to some extent the
possibility to pursue its own agenda (based on ideology).
Finally, lobbying may be at play for the votes of governments. The heterogeneity of firms,
especially across EU-countries, may result in lobbying with opposite signs in different EU countries. In
countries, where firms in the industry have a low productivity, and a low degree of internationalization
(primarily import competing firms) the lobbying efforts may be strongly pro protection. The reverse
tendency is expected in EU-countries with highly productive and highly internationalized firms
(exporting and outsourcing). And in some EU-countries, the given industry may only count little in
production, but the inputs from the EU-industry to other domestic industries (or consumers) may play
a big role.
Even though the governments in different EU countries may be exposed to different degrees of
lobbying from their domestic firms, initiation of an antidumping case is based on a petition from „the
Community industry?. According to the basic anti-dumping regulation „the Community industry?
constitutes of producers of „like products„ except „when producers are related to the exporters or
importers or are themselves importers of the allegedly dumped product“ (EU AD regulation 4(1)). It
follows that an EU producer with its main “production” outside the EU (outsourcing or vertical FDI)
may not be considered as a part of the Community industry and therefore without possibility to
participate in initiating an anti-dumping procedure or to oppose it. Article 5(4) of the basic anti-
dumping regulation states that “the complaint shall be considered to have been made by or on behalf
of the Community industry if it is supported by those Community producers whose collective output
constitutes more than 50% of the total production of the like product produced by that portion of the
Community industry expressing either support for or opposition to the complaint. However, no
investigation shall be initiated when Community producers expressly supporting the complaint account
for less than 25% of total production of the like product by the Community industry”. In countries,
where firms to a high extent have outsourced part of their value chain, lobbying will probably go
against anti-dumping measures. Therefore, in the EU we find an important role both for lobbying from
national and European groups of firms (e.g. organized as an European branch organization), which
occasionally may pull in different directions.
The policy authority of the Commission makes it a natural target for interest group influence,
especially since it is not given that the preferences of the Commission fits in with that of the Council,
which by itself, as shown above, may be quite diverse. Therefore, there are reasons to believe that
European groups are targeting their lobbying against the Commission and the national groups against
their governments in the Council. The Commission is probably not very exposed to lobbying of the
Grossman-Helpman “political contribution type”, but is more dependent on information provision by
interest groups (Belloc and Guerrieri, 2008). To ensure that all contributions to EU trade policy can be
heard (not just the involved firms and branch organizations) the Commission launched in 1998 the so-
called ?Civil Society Dialogue? where not-for-profit civil society organizations like trade unions,
employers federations, NGO?s can enter a dialogue with the Commission on trade policy issues.
Generally, the discretion of the Commission in anti-dumping cases is limited by the fact that the
Council imposes the final tariff.
With a parallel to gravitation models for international trade, our question in this paper is to which
extent geographical or political proximity to Brussels, the political centre of the EU, makes anti-
dumping petitions more or less likely to succeed? We provide a tentative answer to the question by
estimating a set of determinants of the probability of success in anti-dumping petitions, and the
subsequent value of the (preliminary and final) anti-dumping measures implemented.
Our results suggest that being geographical distant from Brussels makes the success of anti-
dumping petitions more probable, but does not influence the level of implemented duties. The
ideological distance to the country chairing the EU Council of Ministers reduces the chances of
approval an anti-dumping petition, but, given approval, rightwing governments chairing the Council
increase the chance for a higher level of protection.
The rest of the paper is structured as follows. Section 2 describes the empirical model and
outlines our prior expectations. Section 3 presents the basic results while section 4 explores the findings
in further depth and concludes.
2. Empirical model
Our overall aim of this paper is to estimate what determines the success or failure of anti-dumping
petitions in the European Union. To that purpose we formulate two empirical models for “success” in
petitioning for anti-dumping measures.3 In the first the dependent variable is a dichotomous variable
indicating if the petition (in a given case = one product, one dumper country) is finalized with the
imposition of an anti-dumping measure or not. In the second the dependent variable is the level of ad
valorem (preliminary and final) tariffs implemented (for a given case), given that the petition is
successful in the first case
In both models, we include a set of independent variables consisting of the following.
We first of all include the average distance from the economic centre (the capital) in the home
countries of the petitioners to Brussels (measured as the average distance in 1000km). 4 The intuition
behind this is twofold. One could on the one hand argue that petitioners situated close to Brussels are
in a relatively better position to influence decision-making by being geographically close to decision-
makers, which could both imply lower lobbying costs and mean that decision makers (primarily the EU
Commission) are more sensitive to the arguments of petitioners – they are more likely be able to „see it
for themselves?. On the other hand, countries on the borders of the Union are situated furthest from
Brussels and most likely to trade extensively with non-EU countries, and thereby more likely to face
direct international competition from potential dumping countries. If the first type of mechanism exists
and dominates, we would expect a negative effect of distance from Brussels while we would expect a
positive effect if the second type of mechanism clearly dominates.
Second, we add the share of countries represented among petitioners, as groups consisting of
firms from several countries may have substantially more political support which is revealed in the
Advisory Committee and in voting in the Council. Similarly, as a direct measure for the costs of
coordination among petitioning firms and countries we use the average bilateral distance between the
economic centres of countries with petitioners assuming that it is not so much the distance to Brussels
that matters, but the distance to the other firms with whom the firms have to negotiate before
petitioning. We also include the number of petitioners, which serves as a proxy for the size and
concentration of the petitioning group or industry. Larger and more concentrated industries may
increase the probability for success in anti-dumping cases, but one could also argue for negative effects
in these situations, since collusion between more firms, more countries and more diverse interests
3 We only look at the outcomes of anti-dumping cases, when a case is filed, see fotnote 1.
4 We also experiment with the degree of latitude as a distance measure.
increase the coordination costs, as originally stressed by Olson (1965). In cases where no named
petitioning firms are given in the anti-dumping documents, there is either a real or an ad hoc branch
organization behind the petition. To take these cases into consideration we construct an organization
dummy taking the value „0? for a branch organization as a petitioner and a „1? for name given firms as
Third, we include a set of political variables. We first include a measure of the political ideology
of incumbent governments averaged over all petitioning countries, based on the presumption that
leftwing governments traditionally will be more prone to support protectionist measures (Milner and
Judkins, 2004). We also add the government ideology of the country chairing the EU at the time of an
anti-dumping decision, which combined give us the „ideological? distance to Brussels. If the chairing
country has any discretionary influence of decisions or the general policy direction of the Union, we
expect that traditionally liberalist countries (in the European sense of the word) would be less likely to
support such measures that aimed at reducing trade.
Fourth, we add the combined GDP for all petitioning countries on the assumption that
economically larger countries have more say in Union decisions The economic variables also includes
the average trade volumes of petitioning countries (in percent of GDP) to allow for different degrees of
exposure to international competition, assuming the economy will be less sensitive to potential
dumping when trade openness is high. Furthermore, we add, industry dummies to take into account
that some industries are more prone to petitioning. We construct four dummies based on the three-
digit NACE codes of petitioning industries, constructed to capture different effects across labour-
intensive industries, capital-intensive industries, resource-intensive industries, and an „other? category.
We also add a dummy for whether the petition is against producers from non-market economies, as
these are arguably more likely to achieve the level of coordination necessary to dump the exports across
a number of producers. Finally, we use dummies for countries chairing the Council and time dummies.
With respect to the two dependent variables in the following, we treat every petition against each
dumper country as separate petitions even though these petitions are sometimes packaged against
several countries. However, not all petitions are approved in each package. This gives us in the model
with the dichotomous success variable 588 observations, out of which 69 percent were successful in
being granted anti-dumping protection, see Figure 1 for the development of anti-dumping petitions
1978-2004 and the number of successes. In our two models with duty levels we have 305 and 241
observations for the preliminary and final duties respectively with the average value of granted
preliminary and final duties at 29% and 32% respectively.5 Data sources and data descriptions are
presented in appendix Table A1, and summary statistics in Tables A2-A4.
3. Basic results
We first estimate the probability of success or failure in a simple probit model. Subsequently, we
estimate the value of the preliminary and final protection (the ad-valorem tariff) in all filed cases 1978-
2004, where some anti-dumping measure was granted.
3.1. Antidumping ‘success’: Dichotomous variable
We start in Table 1 by estimating a baseline model in which seven variables always enter: 1) a dummy
for whether the alleged dumping products are from non-market economies; 2) the log average distance
of all petitioning countries to Brussels; 3) the average government ideology of petitioning countries; 4)
a dummy variable for NACE 3 coded petitioning industries, i.e. petitions from resource-intensive
industry; 5) a dummy for EU organization, which takes care of problems with our assumption of non-
specified claimants; 6) the average trade share of GDP of petitioning countries; and 7) and the
government ideology of the country chairing the EU at the time of decision. We supplement this
baseline with either one or a combination of the following measures of the size of the lobbying
coalition: 1) the number of petitioners; 2) the number of petitioning countries as a share of all EU
countries, which takes care of problems pertaining to EU enlargement; and 3) a proxy for „coordination
costs? calculated as the average bilateral distance among countries with petitioning firms. Year and
country chair dummies proved always to be jointly significant and are consequently included
throughout. On the other hand, preliminary tests showed that the combined GDP of all countries from
which the petitioning countries come was always insignificant; we hence do not include it.
The estimates in Table 1 first of all suggest that petitions from resource-intensive industries are
less likely to succeed in getting anti-dumping protection while petitions against imports from non-
market economies are more likely to succeed. One could, for example, expect that labour-intensive
industries are more sensitive to competition from non-market economies than other industries, which
would imply that this industry would be more likely to file petitions against non-market economies than
5 We note that the number of observations is larger in Table 1 than in Tables 2 and 3, and that the number of observations
in Table 1 is smaller than the full sample. While the first discrepancy is due to our excluding unsuccessful petittions from
further analysis, the second is due to ten early anti-dumping petitions being perfectly predicted by our model.
other industries and lobby harder for substantial protection. But it appears that „resource intensive
industries? are the only significantly „deviating? industries. This group of industries includes e.g.
manufacturing of wood products, pulp and paper, non-metallic mineral products, basic metals and
fabricated metal products, product group where less developed countries often have comparative
advantages, but also industries that are relatively insignificant in EU value added and employment. As
expected, filing cases against non market economies is more successful than filing cases agains market
economies, c.f. the above citation from WTO that “Non-market economy treatment normally yields
significantly higher duties” (WTO, 2009: 53).
We also find throughout that groups of relatively more rightwing countries (with petitioners), and
petitions handled, while countries with a relatively rightwing government chairs the EU Council, are
less likely to succeed. On the other hand, petitions from countries in the geographical periphery of the
Union are more likely to be supported by the EU anti-dumping system. Only one of the measures of
the size of petitioning coalitions is clearly significant: Our measure of „coordination costs? is positively
associated with success, most likely reflecting the role of high coordination costs as commitment signal.
As for the size of these estimates, we start with the distance to Brussels. Calculating marginal
effects suggests that increasing the average distance of petitioning countries by 500 kilometres increases
the probability of succeeding by roughly 23 percent. Petitioners from more open economies are, as
expected, less successful in their anti-dumping petitioning. Changing the average political ideology of
petitioning countries by 1 (e.g. from a moderately leftwing government to a moderately rightwing)
decreases the probability of succeeding by about 33 percent while a similar change in the ideology of
the chairing country induces a decrease of 29 percent. Taken together, these estimates indicate that the
ideological distance to Brussels, represented by the chairing countries, may exert a substantial effect on the
likelihood of succeeding in petitioning for anti-dumping measures.6 We are fairly certain that these
results are not driven by single countries, as a series of jackknife estimates (excluding single petitioning
countries and single chairing countries one at a time) yields very similar and qualitatively unchanged
As such, we find that both geographical and ideology distance matters to the success probability
of anti-dumping petitions in the EU. However, how much protection is provided is another matter to
which we turn next.
6 By estimating the model with a ‚difference in ideology„ variable calculated as the absolute value of the difference between
‚government ideology„ and ‚ideology of EU chair„ (and excluding the government ideology and chair ideology varibale) we
confirm that ideological distance is a significant explanatory variable.
3.2. Anti-dumping ‘success’: Ad-valorem duties
In this sub-section we therefore test if the same explanatory variables as used to explain the success or
not of an antidumping petition also can explain the subsequent value of anti-dumping measures
implemented, given that petitions succeed in a first round. We note that the EU procedure first posts a
preliminary decision, and only subsequently, when this has been known for some time, reports a final
decision on the applicable anti-dumping duties. First, we look at the preliminary ad-valorem duties set
by the EU Commission and next the final ad-valorem duties set by the EU Council of Ministers.
3.2.1 Preliminary duties
The results for the preliminary duties are presented in Table 2. In the baseline specification, we note
that only two of the explanatory variables are able to contribute to the explanation of the level of the
preliminary duties, namely the non-market economy dummy and the chair ideology variable. As
expected, non-market economies results in significant higher tariffs although we can only speculate in
the conclusions about why this is. We also find that the more conservative is the government chairing
the EU at the time of the preliminary decision, the higher is the ad-valorem anti-dumping duty.
However, contrary to the first stage of anti-dumping decision procedures, we find some evidence
that a larger number of petitioners results in smaller preliminary duties. As such, the results suggest that
smaller groups of petitioners are able to lobby for higher levels of protection than larger groups, which
is in line with the positive sign for the „success no-success? model above. We do, nonetheless, note that
the effect is fairly small. On the other hand, the size of the effects of chairing country ideology is larger.
Since the preliminary duties are fixed by the EU Commission it is on the face of it a surprise that the
ideology of the EU chair significantly influences the level of preliminary protection, so more rightwing
chairs results in higher protection. The influence of national governments, including the EU chair, at
the preliminary stage is through the Advisory Committee, where representatives from national
governments and the EU chair may signal to the Commission the level of acceptable protection.
Therefore the combination of the results for the EU chair variable in Table 1 and Table 2 is the
following. Right-wing EU chairs may have so much discretion in antidumping policy that they generally
try to reduce the amount of anti-dumping measures, but in cases where measures are unavoidable
(because of a perceived majority in the Council) they go for a „hard policy?. Whether these preliminary
influences survive the final decision is the last question in the row.