Dumping

Dumping

The World Trade Organization Agreement on dumping defines it broadly as a company exporting a product at a price lower than the price it normally charges on its home market for a "like" product.When goods are imported at a price below the domestic producer's price, cries of "unfair competition" and "dumping" are often heard.Pressure is exerted among the countries government to do something to protect their market against the imported products.The government may impose duties to the imported product under three WTO agreements.The Anti-dumping Agreement and The Agreement on Subsidies and Countervailing Measures take action against those importers who are importing at unfair import prices.The third agreement, The Safeguard Agreement, takes action when the import price is fair but the imports are seriously damaging domestic production.Domestic companies can request safeguard action if the market share of imports would otherwise substantially increase.This usually involves the obligation of quantitative restrictions on imports, though these cannot be targeted at a specific country.Anti-dumping provisions, on the other hand, allow nations to retaliate against specific trading partners who are exporting goods at prices lower than those that thrive in their domestic markets.This retaliation generally involves charging a compensatory duty to bring the price of a specific good from a specific country back to a “normal” price.Finally, countervailing tariffs are measures designed to reduce the effect of foreign subsidy programs. All are intended to be short-term actions that resolve the issues quickly.However as seen in many dumping cases worldwide that is often not the case.
When a country believes that goods are being dumped into their country, thefirst step they can take is to file a formal complaint against the importer.The domestic government, based on detailed requirem…

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