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    CASE STUDY Down With Dumping

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    Jona Francisco
    This document discusses the increasing use of anti-dumping measures by countries. It notes that while international trade theory argues for open trade, governments still intervene through measures like anti-dumping duties. Where developed countries once primarily accused developing nations of dumping, now developing countries are increasingly filing anti-dumping suits of their own. The document also explains that the WTO allows anti-dumping tariffs under certain conditions when domestic industries can show injury from lower-priced imports. However, critics argue anti-dumping measures can keep prices artificially high and hurt international competition.

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    CASE STUDY Down With Dumping

    Uploaded by

    Jona Francisco
    316 views2 pages
    This document discusses the increasing use of anti-dumping measures by countries. It notes that while international trade theory argues for open trade, governments still intervene through measures like anti-dumping duties. Where developed countries once primarily accused developing nations of dumping, now developing countries are increasingly filing anti-dumping suits of their own. The document also explains that the WTO allows anti-dumping tariffs under certain conditions when domestic industries can show injury from lower-priced imports. However, critics argue anti-dumping measures can keep prices artificially high and hurt international competition.

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    CASE STUDY Down with Dumping

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    This document discusses the increasing use of anti-dumping measures by countries. It notes that while international trade theory argues for open trade, governments still intervene through measures like anti-dumping duties. Where developed countries once primarily accused developing nations of dumping, now developing countries are increasingly filing anti-dumping suits of their own. The document also explains that the WTO allows anti-dumping tariffs under certain conditions when domestic industries can show injury from lower-priced imports. However, critics argue anti-dumping measures can keep prices artificially high and hurt international competition.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    316 views2 pages

    CASE STUDY Down With Dumping

    Uploaded by

    Jona Francisco
    This document discusses the increasing use of anti-dumping measures by countries. It notes that while international trade theory argues for open trade, governments still intervene through measures like anti-dumping duties. Where developed countries once primarily accused developing nations of dumping, now developing countries are increasingly filing anti-dumping suits of their own. The document also explains that the WTO allows anti-dumping tariffs under certain conditions when domestic industries can show injury from lower-priced imports. However, critics argue anti-dumping measures can keep prices artificially high and hurt international competition.

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    © All Rights Reserved
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    CASE STUDY Down with Dumping

    “WTO Agrees to Probe EU Duties on Chinese Footwear..... Canada launches


    WTO Challenge to U.S. .......Mexico Widens Anti-dumping Measure...... Rough Road
    Ahead for U.S-China Trade, It Must Be Stopped,” is just a sampling of headlines from
    around the world.

    International trade theories argue that nations should open their doors to trade.
    Conventional free-trade wisdom says that, by trading with others, a country can offer its
    citizens a greater quantity and selection of goods at cheaper prices than it could in the
    absence of trade. Nevertheless, truly free trade still does not exist because national
    government intervene. Despite the efforts of the World Trade Organization (WTO) and
    smaller groups of nations, government still cry foul in the trade game. On average, 234
    antidumping cases are initiated each year with nearly 70 percent of disputes being
    settled by negotiation. And whereas the United States and the European Union initiated
    half of all WTO cases in prior years, they now initiate only about a quarter of all cases
    more than half are now brought by developing countries.

      In the past, the world’s richest nations would typically charge a developing nation
    with dumping. But today, emerging markets, too, are jumping into the fray. China
    recently launched an inquiry to determine whether synthetic rubber imports (used in
    auto tires and footwear) from Japan, South Korea and Russia are being dumped in the
    country. Mexico expanded coverage of its Automatic Imports Advised System. The
    system requires exporters (from a select list of countries) to notify Mexican officials of
    the amount and price of a shipment 10 days prior to its expected arrival in Mexico. The
    10-day notice gives domestic producer advance warning of low-priced products so they
    can report dumping before the products clear customs and enter the market place. India
    set up a new government agency to handle antidumping cases. Even Argentina,
    Indonesia, South Africa, South Korea and Thailand are using this recently popular tool
    of protectionism.
    Why dumping so popular? Oddly enough, the WTO allows it. The WTO has
    made major inroads on the use of tariffs, slashing them across almost every product
    category in recent years, but it does not have authority to punish companies, only
    governments. Thus, the WTO cannot make judgements against individual companies
    that are dumping products in other markets. It can only pass rulings against the
    government of the country that imposes antidumping duty. But the WTO allows
    countries to retaliate against nations whose producers are suspected of dumping when
    it can be shown that (1) alleged offenders are significantly hurting domestic producers
    and (2) the export price is lower than the cost of production or lower home market price.

    Alternatives to bringing antidumping cases before the WTO do exist. U.S


    President George W. Bush relied on a Section 201, or “global safeguard”. Investigation
    under U.S trade law to slap tariffs of up to 30 percent on steel imports. The U.S steel
    industry had been suffering under onslaught of steel imports from Brazil, the European
    Union, Japan and South Korea. Yet nations still brought complaints about the action
    before the WTO. Similarly, in 2004 the U.S government slapped around 100 percent
    tariffs on shrimp imported from China and Vietnam, charging those nations with
    dumping their crustaceans on U.S shores.

    Supporters of antidumping tariffs claim that they prevent dumpers from


    undercutting the prices charge by the producers in a target market, driving them out of
    business. Another claim in support of antidumping is that it is an excellent way of
    retaining some protection against potential dangers of totally free trade. Detractors of
    antidumping tariffs charge that once such tariffs are imposed, they are rarely removed.
    They also claim that it cost companies and governments a great deal of time and money
    to file and argue their cases. It is also argued that the fear of being charge with dumping
    causes international competitors to keep their prices higher in a target market than
    would otherwise be the case. This would allow domestic companies to charge higher
    prices and not lose markets share forcing consumers to pay more for their goods.

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