False friends? Empirical evidence on trade policy substitution in regional trade agreements

Abstract

Abstract In this paper, we examine the interplay of regional economic integration and the use of bilateral antidumping ( AD ) measures. Our empirical analysis brings three central findings to light: (i) we find that regional trade agreements ( RTA s) generally reduce the likelihood of AD activity among integration partners; (ii) in addition, an improvement in the tariff treatment between trading partners—regardless of whether expressed as the directly faced tariff or as a tariff margin— generally leads to a lower likelihood of bilateral AD and (iii) regarding the interaction of both events, however, a reciprocally higher tariff margin between integration partners leads to a higher likelihood of bilateral AD than an equal tariff margin among non‐integration trading partners. The latter effect seems to be primarily driven by those RTA s with a participation of “South” countries.