Price Effects of the United States (US) Antidumping Investigations in a Non-Market Economy Case: Vietnam’s Shrimp Exports to the US

ABSTRACT

This article investigates the impact of the US antidumping investigations on the prices received by Vietnamese shrimp exporters. Vietnamese shrimp was the target of an antidumping petition filed in 2003 and Vietnam was treated as a non-market economy country. The estimates indicate that, after the final determination, Vietnamese exporters increased their prices by much more than 100% of the antidumping duties in an attempt to eliminate future duties. In addition, no evidence was found for a significant difference in the exchange rate pass-through of affected products. This result differs from the cases of the market economy examined in previous studies.

KEYWORDS:

• Antidumping duty
• exchange rate pass-through
• non-market economy
• trade barriers
• Vietnam

Acknowledgments

I would like to express great thanks to the two anonymous reviewers for their insightful comments and suggestions. I also wish to thank Craig R. Parsons, Sato Kiyotaka, Nagendra Shrestha, and participants at the 16^th International Convention of the East Asian Economic Association at National Taiwan University in Taipei, October 2018 for their valuable comments on the earlier versions of this work. All of the remaining errors are my own.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ According to the US AD law in Title VII of the Tariff Act of 1930 (1930), the term “non-market economy (NME) country” is generally defined as any foreign country that does not run the economy based on market principles, implying that the fair value is not reflected in the sales of final goods. For example, Vietnam and China are designated as NMEs.

² In a market economy case, the USDOC uses the foreign firms’ prices in their home market or third-country market as the “fair value.” For more details about the method for a market economy country, see Blonigen and Haynes (2002).

³ The selection of a surrogate country is under the control of the USDOC based on the AD law. There are some criteria for choosing a surrogate country in an investigation, for example, economic comparability, comparable merchandise, significant producers, and data availability.

⁴ The OLS estimates are omitted for brevity but are available upon request.

⁵ Contemporaneous exchange rate plus the previous three, six, and nine monthly observations.

⁶ The moving average estimates are omitted for brevity but are available upon request.