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

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.