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Analysis of anti-dumping policy on steel imports using multi-input ARIMA intervention model
Abstract
Krakatau Steel, the largest steel producer in Indonesia, has been in loss for several years. One of the reasons is the flow of imported steel to the domestic market. In 2010, Krakatau Steel filed an anti-dumping petition against several countries. The petition was followed up with the initiation of an anti-dumping investigation by the Anti-Dumping Committee of Indonesia (KADI) since June 2011 and applying the anti-dumping policy for CRC/S product from 2013 to 2016. This study aims to determine the magnitude of the impact due to the policy application using the ARIMA Multi- Input Intervention method for three-step functions. The study shows that the initiation of an investigation by KADI had not been able to decrease import. Still, the import itself was declining during the time the policy was applied. The application of the anti-dumping policy starting to affect import from South Korea in May 2013, which decrease by 59.93%, from China in April 2013 decrease by 89.37%, and from Taiwan decreased by 80% in August 2013. Moreover, the Krakatau Steel market share was also increased during the time the policy was applied. However, imports started increasing, and the market share decreased once the policy was no longer applied.
... Step function intervention analysis is commonly known to measure the impact of government policies on a country's import and export, such as the impact of anti-dumping regulations on US wooden bedroom furniture imports from China [3], policy impact air pollution prevention and control action, and zero percent import tariffs on coal exports of Indonesia to China [4], and the impact of anti-dumping policies on Indonesian iron imports [5]. This research focuses on the application of time series analysis, 2 specifically ARIMA step function intervention, to account for the impact of the Ministerial Regulation No.1 of 2015 since January 2015 related banning of lobster seeds fishing (called first intervention) and the Ministerial Regulation No. 56 of 2016 since January 2017 related lobster seeds fishing and export ban policy (called second intervention). ...
An intervention model is an analytical method for evaluating or measuring the impact of an external event called intervention, such as a natural disaster, holidays, sales promotions, and other policy changes. Two types of intervention variables will be used to represent the presence or absence of the event, i.e., a pulse or step. The pulse function is used to represent a temporary intervention, whereas the step function shows a long-term intervention. This study aims to develop a time series model with an intervention of step function for measuring the impact of two policies related to the prohibition of fishing and the export of lobster seeds on the export value of Indonesian lobster. These policies are the Ministerial Regulation No.1 of 2015 since January 2015 related banning of lobster seeds fishing (called first intervention) and the Ministerial Regulation No. 56 of 2016 since January 2017 related lobster seeds fishing and export ban policy (called second intervention). These regulations are designed to ensure lobster sustainability and add value to lobsters that are currently overfished. The results show that both policies significantly affect the export value of lobster in Indonesia, and the interventions have a permanent impact.
The modeling of time series data is an increasingly prominent concept in recent decades. The focus has extended beyond conventional statistical methods to incorporating Machine Learning (ML) technologies. Conventional statistical methods are effective when data have a linear pattern and meet assumptions such as normality of errors and white noise. Meanwhile, ML models are better suited for non-linear data patterns that do not rely on assumptions. It was observed that both methods were not effective when data exhibited both linear and non-linear patterns simultaneously, showing the need for more adaptive modeling to address time series data with mixed patterns. Therefore, this study aimed to apply a hybrid model, specifically an ensemble method for residual forecast (ERF), to predict the import volume of Indonesian fabrics woven from cotton. The results showed that ERF outperformed the conventional Autoregressive Integrated Moving Average (ARIMA) Intervention by providing more accurate forecasts for data with both linear and non-linear patterns. The ERF model outperforms other hybrid models, namely ARIMA-MLP and ARIMA-SVM, across all forecast periods by delivering better accuracy through its ensemble-based architecture that effectively captures time series patterns with intervention effects.
p>Meskipun Indonesia telah mengenakan tindakan anti-dumping terhadap beberapa jenis produk baja, namun impor produk tersebut masih meningkat. Salah satu kemungkinan penyebabnya adalah importasi melalui produk yang dimodifikasi secara tidak substansial atau melalui negara ketiga yang tidak dikenakan tindakan anti-dumping, yang dalam perdagangan internasional umum disebut sebagai praktik circumvention . Studi ini ditujukan untuk membuktikan bahwa circumvention mengakibatkan tindakan anti-dumping atas impor produk baja Indonesia tidak efektif dan untuk memberikan masukan berdasarkan praktik di negara lain supaya kebijakan anti-dumping Indonesia lebih efektif. Circumvention dianalisis dengan membandingkan pola perdagangan antara sebelum dan setelah pengenaan bea masuk anti-dumping (BMAD) menggunakan data sekunder dari Badan Pusat Statistik (BPS) maupun Global Trade Information Services (GTIS). Hasil analisis menunjukkan adanya indikasi kuat bahwa circumvention mengkibatkan pengenaan tindakan anti-dumping impor produk baja di Indonesia menjadi tidak efektif. Oleh karena itu, sangat penting bagi Pemerintah Indonesia untuk segera melakukan penyempurnaan terhadap Peraturan Pemerintah No. 34/2011 tentang Tindakan Antidumping, Tindakan Imbalan, dan Tindakan Pengamanan Perdagangan dengan memasukkan klausul tindakan anti- circumvention yang setidaknya mencakup bentuk-bentuk dan prosedur tindakan, sebagaimana yang telah dilakukan beberapa negara seperti: AS, EU, Australia, dan India.
Although Indonesia has imposed anti-dumping measures on several types of steel products, the import of steel products is still increasing. One possible cause is that imports are made by non-substantial modification of product or through a third country which is not subject to anti-dumping measures, which is generally referred as circumvention practice. This study is aimed to prove that circumvention made Indonesian anti-dumping actions on the steel products ineffective. This also study provides recommendation for a best practice for other countries so that Indonesia's anti-dumping policy can be more effective. Circumvention was analyzed by comparing trade patterns between before and after the imposition of anti-dumping duty using secondary data from the Central Bureau of Statistics (BPS) and the Global Trade Information Services (GTIS). The results of the analysis indicate that circumvention became the reason why Indonesian anti-dumping measures on imported steel products are ineffective. Therefore, it is very important for the Government of Indonesia to immediately make amendments to the Government Regulation No. 34/2011 on Antidumping, Countervailing, and Safeguard Measures by adopting clauses of anti-circumvention. This can be done bycovering the forms/types and procedures of action, as has been implemented by several countries such as the US, EU, Australia, and India. </p
The study attempts to determine the impact of government policies of import of gold in India on the domestic price of gold during 2013 using Autoregressive Integrated Moving Average (ARIMA) intervention model. 2013 was an amazing year for Indian gold market where the price had reached its zenith. In April 2013, to curb a record trade deficit, India imposed an import duty of 10 percent on gold and tied imports for domestic consumption to exports, creating scarce supply of the yellow metal and boosting premiums to curtail the Current Account Deficit (CAD). The objective of the paper is to model the impact of this intervention by the government on the domestic price of Indian gold. Suitable ARIMA model is fit on the preintervention period and thereafter the effects of the interventions are analysed. The results indicate that ARIMA (1,1,1) is the most suitable model during preintervention period. Intervention analysis reveals that there is significant decrease in domestic price of gold by 56% from 2013. The model may be used by policymakers to analyse the future of gold before framing regulations and policies. © 2016 Jyothi Unnikrishnan and Kodakanallur Krishnaswamy Suresh.
Trade remedies, i.e. Anti Dumping, Anti Subsidy and Safeguard Action, are instruments of international trade prolicy that are the most frequently used by importing Member Countries of the World Trade Organization (WTO) to ptotect their domestic industries. However, Indonesia has been categorized as a Member Country which is the least frequently in the use of the instrument. This article recomemends that Indonesia employ the instrument more proactively in order to protect domestic industries. Parallel to this, dtrengthening the legal system of trade remedis is also urgent, since a strong lehal system either its substances, structures, and cultures, will play a crucial role on the effectiveness of the protection of domestic industries.
In recent years, the annual imports of wooden bedroom furniture by the United States have been over five billion dollars, with more than two billion dollars of that coming from China. This trend led to an antidumping action against China in October 2003. Since January 2005, antidumping duties of 0.83% to 198.08% have been imposed on individual Chinese firms. To assess the impact of this antidumping action, intervention analysis was employed to examine the import values of four furniture commodities and the prices of two of them over 19972008. China and six other major competing countries were included in the analysis. With regard to import values from China, significant trade investigation effects were identified: the petition announcement generated a positive impact in March 2004; the preliminary less-than-fair-value (LTFV) determination had a negative impact from Julyto December 2004. However, the final implementation did not show any expected trade duty effect. The aggregate impact of the antidumping action on import values from China over 20032008 was approximately equivalent to a 1-month import reduction. The impact on the unit prices for China was insignificant. For the six competing countries, intervention analyses revealed that the antidumping action generated a positive trade diversion effect, with the magnitude smaller than the trade depression effect on China.
We argue that the costs of antidumping (AD) protection are substantially higher than standard tariff analysis would suggest. First, since AD duties are often adjusted during administrative reviews, the welfare cost of AD duties increases over time. These adjustments effectively transfer heavily distorted AD revenue to foreign firms. Second, AD duties are more costly than simply the visible costs of AD protection. There are significant additional costs associated with the prospect of protection imposed when foreign and domestic firms alter their profit maximizing behavior in order to influence the outcome of potential AD investigations. These costs may exceed the direct cost of AD duties.
In 2009, the EU imposed anti-dumping duties on aluminum foil imported from Armenia, Brazil, and China for five years. The final determination resulted in the imposition of definitive anti-dumping duties of 13.4% (Armenia), 17.6% (Brazil), and 6.4–30% (China). This paper quantifies the direct and indirect effects of the EU anti-dumping duty on EU and US imports from targeted and unaffected countries using detailed data for the years 2006 through 2012, and controlling for exports of all products within the aluminum sheet, plate, and foil manufacturing industry from all countries. The findings point to the trade destruction, trade depression, trade diversion, and trade deflection effects typically found in the existing literature. However, the uniqueness of this case lies in the fact that the Armenian exporter is a subsidiary of a Russian firm. And as Armenia's exports to the EU declined, they expanded rapidly to the US. At the same time, the US imports from Russia, a country not directly touched by the anti-dumping ruling, declined dramatically, and were diverted to the EU. This points to the potential ineffectiveness of anti-dumping duties in the presence of multinational corporations with production facilities located across countries differentially impacted by anti-dumping duties.
This article examines the relationship between antidumping duties and strategic industrial policy. We argue that the dynamic between the two instruments is more complex and elaborate than that offered by the conventional account. We use the recent
China–X-Ray Equipment
dispute as a case study to show that linkage between the two instruments may not be the consequence of a government-led policy but instead a result of firm-driven responses to an industrial policy. This in turn may lead to antidumping tit-for-tat behavior between WTO members. We also analyze how WTO litigation serves as a means to alter the payoff and discuss the implications and unresolved questions that remain following the
China–X-Ray Equipment
ruling by the WTO.
This article discusses the effect of interventions on a given response variable in the presence of dependent noise structure. Difference equation models are employed to represent the possible dynamic characteristics of both the interventions and the noise. Some properties of the maximum likelihood estimators of parameters measuring level changes are discussed. Two applications, one dealing with the photochemical smog data in Los Angeles and the other with changes in the consumer price index, are presented.
Dumping is whatever you can get the government to act against under the antidumping law. J. Michael Finger (1993). Antidumping policy has become one of the most important instruments for protection in the international trade system, but at the same time it is the subject of an intense, though rather chaotic, debate. This paper provides an overview of the antidumping literature and the current issues. First it describes the origins of antidumping policy and provides some basic statistics on its current use drawn from several empirical studies. Next the paper discusses the economic foundations of antidumping law by examining the traditional and modern theories of dumping, as well as the industrial organization literature on price discrimination and predatory pricing. It is demonstrated that those economic foundations are weak. The paper also considers the fairness rationales for antidumping policy. Finally, it addresses the criticisms of antidumping laws, in particular in the context of the current antidumping versus competition policy debate, and discusses a variety of proposals for reform that have been made. The paper shows that the 1997 "cease fire" agreement between Canada and Chile is a promising approach toward reform of antidumping policy. Copyright 2000 by Blackwell Publishers Ltd
Intervention analysis is proposed as a method for estimating the effects of antidumping actions in the presence of a domestic cartel. Data requirements and modeling effort compare favorably with traditional structural model approaches. The method is applied to an antidumping action brought to the European Commission and in which the European producers of the product were fined after an anticartel action by the Commission covering an overlapping period. Intervention analysis is applied to distinguish the effects of the antidumping action from those of changes in cartel behavior.