Anti-dumping duty circumvention through trade rerouting: the case of China and the European Union

This paper studies anti-dumping duty circumvention by Chinese exporters through trade rerouting via third countries or regions. Using yearly trade data for the period 2002-2014, I provide evidence that anti-duty circumventing does indeed take place. I use a multiple fixed effects model, controlling for country*product, product*time and country*time fixed effects at the same time. I find a positive relationship between European imports from third countries and lagged Chinese exports to the same third countries for products subject to anti-dumping duties. This effect is present only for trade quantity data, not for trade value data. In addition, trade rerouting is negatively related to distance from China to the third country or region. The results are robust to excluding Special Administrative Regions of China and Taiwan from the data. Exporters regularly use these regions in anti-dumping evasion practises. Finally, the results are also robust when country-product combinations that are never traded (zeroes) are excluded.