EU's Anti-dumping On China-A Political Economics' Analytic Frame

After the apparent serene of China-EU trade conflict in the first half of 2007, China experienced another intense round of anti-dumping investigation from EU. Predictably, EU's anti-dumping on China is not likely to come to its end in the near future but, for a good chance, grow. This seems rather a contradiction to economists' study, which theoretically shows that imposing anti-dumping tariff on Chinese export goods harms the whole welfare of the importer. Pure economic approach seems helpless in explaining the large discrepancy between theory and the real world. In this paper, however, another approach has been attempted to find out the endogenous logic behind the discrepancy. The approach used here is political economic analysis frame. By examining the political and economic determinants of EU member states' attitude to antidumping, modeling a dynamic game to analyze the political interaction of EU's anti-dumping on China, this paper hopes to find the key.First of all, this paper gives an overview of the EU's anti-dumping legislation procedure. It's found that whether to impose anti-dumping tariff on Chinese product is decided not only by EU's anti-dumping executing organization—the European Commission, but, to a large extent, by Council of the EU, which is composed of delegates from all member states. Besides, the definition of antidumping product and the rate of anti-dumping tariff are heavily influenced by member states' attitude towards anti-dumping on China. In fact, the attitude of the 27 member states is not necessarily the same, some even shows contradict to each other. Therefore, this paper creatively sort out four political economic models to include all member states, namely, the "Pro-antidumping Model", "Dis-antidumping Model", "Medi-antidumping Model" and the "Poten-antidumping Model". Economic and Political characteristics of different model states were fully investigated. Given that simple majority voting system is adopted by the Council of EU, in order to achieve majority, keen gaming is popular among member states of different models and different interest groups in each states. Then this paper models a dynamic game, which theoretically implies that in order to optimize trade gain, China should actively take countermeasures, lobbies or gives pressures on interest-relating groups. This will result in more fully expressed trade benefit of different model states. Finally, this paper gives the detail countermeasures to cope with the problem of EU's anti-dumping on China.