In protectionism we trust? Exploring the effects of the 2009 EU antidumping case

This paper researches both the economic as well as the political effect of the 2009 antidumping (AD) measures imposed by the EU on Chinese steel imports. First, I use Eurostat data to show that the protected industry (NACE 24) did not fully recover its production levels after the AD. Secondly, European Social Survey data from 2002 to 2016 is analyzed to investigate the effect of the measures on the trust in the European Parliament. Matching workers in NACE 24 to comparable workers in other industries and conducting a difference-in-difference analysis shows that this trust significantly declined after the intervention. Regional externalities also seem to exist, as regions that contained a higher share of NACE 24 workers showed a significantly lower trust in the European Parliament over time than less affected regions. The declined trust could originate from the increased unemployment in the NACE 24 sector after the AD measures were imposed, as the industry lost 10 to 23 percent of its jobs in France and Spain respectively. These results suggest that less effective protective trade policies could deteriorate the trust in the institution implementing such policy.