An unfair trade practice, dumping, occurs when a company sells its products abroad at prices lower than the price of the market in which they are produced, or even below cost. This mainly happens because export firms may have an excess capacity, and want to have a larger market share in a foreign country against domestic products. This practice is internationally considered as a practice of unfair competition. Therefore, anti-dumping measures are imposed. The anti-dumping duty is independent of import duties and functions additionally to the common tariff practices.
Many times, however, it may be the case that anti-dumping measures are imposed on certain products without having them previously dumped. This is more than dangerous. The unfair imposition of anti-dumping measures aims to strengthen the local industry against imported goods, which worsens protectionism worldwide .
Recently, the U.S. and China were engaged in announcements of additional mutual anti-dumping measures. Within a very short time, the U.S. imposed high temporary tariffs on Chinese aluminium products and steel as well as some types of paper. China responded by imposing tough antidumping tariffs on U.S. imports of chicken and nylon in retaliation. In general, the confirmation of the existence of this illegal practice is extremely difficult and requires extensive timely research. Furthermore, it should also be investigated whether the particular industry has been harmed.
In the present study, the framework of international trade and the various measures such as tariffs and quotas will be presented to understand better the international economic environment. Dumping and antidumping measures will be examined both on the financial side but also on the legal side. Finally, the effect of antidumping measures to developing countries will be further studied.
Table of Contents
1. Introduction
2. International trade
3. Global economic competition and the liberalization trend of international trade
4. The unstable economic hegemony of the U.S.
5. Trade Barriers
5.1 Tariffs
5.1.1 Tariff on a single commodity with a stable global price
5.2 Non-Tariff Barriers
5.2.1 Export Subsidies - Premiums
5.2.2 Restrictions On Imports – Exports // Import Quotas
5.2.3 Voluntary Export Restraints – VER
5.2.4 Local Content Requirements
6. Unofficial Barriers
6.1 Administrative Policies
6.2 Embargoes
6.3 International Cartels
6.4 Dumping Policies
7. Adoption of Antidumping Measures
7.1 Antidumping measures
8. Dumping – Legal Framework
8.1 Existing Law
8.1.1 International Framework
8.1.2 European Community Legislation
9. Dumping and countervailable subsidies
9.1 Dumping and Subsidies
9.2 Interest of the Community
9.2.1 Material injury and causal link
9.2.2 Legal framework
9.2.3 Changes to EU legislation in 2001
10. Conclusion on measures
11. Reasons for using measures of economic trade policy
11.1 Political Reasons Jobs & Business
11.2 Support of Economic & Foreign Policy
11.3 Consumer Protection
11.4 Protection of Human Rights
11.5 Economic Reasons
11.5.1 State Revenues
11.5.2 Infant Industry
12. Shortcomings of GATT
12.1 Reform of the Anti-Dumping Code
12.2 The Agreement On Technical Barriers To Trade Goods – Environmental Dumping
13. Conclusions on the Uruguay Round
14. Development and Developing Countries
15. Developing Countries and Protectionism
16. Recent Development – Tariffs and AntiDumping
17. The theory of Customs Union - Trade Diversion
18. Trade effects of antidumping protection
19. “South – South” trade – antidumping
20. Conclusion
Research Objectives and Core Topics
This work examines the framework of international trade, focusing on the financial and legal aspects of dumping and antidumping measures, with a specific emphasis on their adverse effects and implications for developing countries.
- Analysis of trade barriers, including tariffs and non-tariff measures.
- Examination of the legal framework governing dumping and international antidumping policies.
- Evaluation of political and economic motivations behind protectionist trade policies.
- Assessment of the impact of antidumping measures on "South-South" trade.
- Discussion on the challenges faced by developing countries in the current global economic climate.
Excerpt from the Book
Developing Countries and Protectionism
The survey by the World Bank (2009) states that the tariff increases correspond to half of the protectionist measures taken by countries. Some tangible examples are the following: Ecuador increased the tariffs on 600 commodities. Russia has increased its tariffs on imported cars. India has increased the steel tariffs. The developing countries have reasons to raise tariffs without violating the agreements of the WTO, compared to industrial countries, because the gap between the rates imposed and the ceiling which they have accepted is much higher than one of the industrialized countries.
Protectionism in Argentina appears with the introduction of various «distinct licenses» to import auto parts, textiles, etc. Other states have taken measures to ban imports and justify the need for austerity measures or for reasons directly related to environmental protection. An example is China, which bans imports from the European Union of food and milk, including pork from Ireland, Italian and Spanish brandy and dairy products from Spain. India has imposed ban on toys from China. However, there is another point of concern, which is related to the imposition of anti-dumping measures, which increase daily. They had begun to decline according to decisions and agreements of the World Trade Organization during the second half of 2007. India is the pioneer, but also are the European Union and America, which recently have resorted to these measures. There is a group of nations, which seems that it does not refrain to measures for a tariff protectionism increase. These countries are mostly industrial. Instead of engaging in tariff increases, they subsidize their troubled industries and particularly the automotive industry. Providing subsidies to western automakers will encourage them to repatriate their manufacturing plants and factories, which have been moved to other countries due to cheaper labour there.
Summary of Chapters
Introduction: Outlines the definition of dumping as an unfair trade practice and introduces the need to study its legal and financial effects, especially on developing nations.
International trade: Explains the fundamental mechanics of international trade and the divergence between economic theory and political reality regarding trade policies.
Global economic competition and the liberalization trend of international trade: Discusses the existence of economic "border" lines among nations despite the global trend toward trade liberalization.
The unstable economic hegemony of the U.S.: Analyzes the transition from GATT to the WTO and the role of the U.S. in shaping international trade agreements.
Trade Barriers: Provides a comprehensive overview of tariff and non-tariff measures used by states to influence international trade.
Unofficial Barriers: Covers administrative policies, embargoes, and international cartels as covert methods of market protection.
Adoption of Antidumping Measures: Details the reasons countries adopt antidumping measures, such as retaliation or WTO accession.
Dumping – Legal Framework: Examines the international and European legal structures designed to combat unfair trade practices.
Dumping and countervailable subsidies: Defines dumping and subsidies and explains the legal criteria for determining material injury to domestic industries.
Conclusion on measures: Reviews the trends in enforcement of antidumping measures in the Community during 2001.
Reasons for using measures of economic trade policy: Categorizes the justifications for protectionism into political and economic motivations.
Shortcomings of GATT: Highlights the limitations of previous trade negotiation rounds and the emergence of non-tariff barriers.
Conclusions on the Uruguay Round: Critiques the practical application of Uruguay Round decisions and emphasizes the importance of a multilateral framework.
Development and Developing Countries: Addresses the challenges of poverty in the Third World and the necessity of integrating these economies into the global system.
Developing Countries and Protectionism: Discusses the specific protectionist trends observed in developing nations and the impact of the global financial crisis.
Recent Development – Tariffs and AntiDumping: Reports on recent tariff reduction agreements among developing nations.
The theory of Customs Union - Trade Diversion: Explores the welfare effects of economic integration and the balance between trade creation and trade diversion.
Trade effects of antidumping protection: Analyzes the primary trade effects, including trade diversion, trade destruction, and trade deflection.
“South – South” trade – antidumping: Investigates the rising trend of developing countries imposing protectionist measures against one another.
Conclusion: Summarizes that while free trade is theoretically beneficial for efficiency, its implementation is a political process that often requires careful consideration of social welfare and income redistribution.
Keywords
Antidumping, Dumping, International Trade, Protectionism, Developing Countries, WTO, GATT, Tariffs, Non-Tariff Barriers, Trade Diversion, Subsidies, Economic Policy, Global Market, Trade Liberalization, Trade Deflection.
Frequently Asked Questions
What is the primary focus of this book?
The work focuses on the nature of dumping as an unfair trade practice and investigates how antidumping measures affect international trade, with particular attention paid to the consequences for developing countries.
What are the central themes covered?
The main themes include the definition and legal framework of dumping, the reasons why governments implement protectionist trade policies, the impact of trade barriers on national economies, and the challenges faced by developing nations in a globalized trade system.
What is the research objective of this study?
The primary goal is to examine both the financial and legal dimensions of antidumping measures to determine their impact on developing economies and to understand how these policies fit into the broader global economic environment.
Which scientific methods are primarily utilized?
The study relies on an extensive review of existing trade literature, economic theory, and the analysis of official trade regulations and historical data provided by institutions such as the World Bank and the WTO.
What topics are discussed in the main body?
The main body covers a wide range of trade instruments, including tariffs, quotas, subsidies, and administrative barriers, as well as the legal mechanisms like GATT and WTO agreements that regulate them. It also provides a detailed look at the specific case of "South-South" trade.
Which keywords best characterize this work?
Key terms include Antidumping, Protectionism, Developing Countries, Trade Diversion, GATT, WTO, and International Trade.
How does the book describe the impact of antidumping measures on developing countries?
The book suggests that antidumping measures often serve as a "safety net" for developing countries but can lead to negative trade effects, such as a reduction in imports and potential retaliation from other nations, ultimately hindering their trade growth.
What role does the "South-South" trade play in the author's argument?
The author highlights "South-South" trade as an increasingly important area where developing countries are actively using antidumping measures against one another, which often contradicts their own efforts toward trade liberalization and requires urgent reform at the WTO level.
- Arbeit zitieren
- Fotini Mastroianni (Autor:in), 2010, Adverse Effect of Antidumping Laws on Developing Countries, München, GRIN Verlag, https://www.grin.com/document/346957
