Antidumping Case Study

“Antidumping and its influence on the performance of duties in the local markets: A Chinese case study.”



“Antidumping and its influence on the performance of duties in the local markets: A Chinese case study.”

Introduction:

The antidumping measures are used more frequently than tariffs, quotas and Voluntary Export Restraints (VERs) have decreased because the GATT and WTO have some regulations specified over a period of twenty years. But as against this, the practice of antidumping and its consequent measures have freshly surfaced in the form of an innovative and extensive type of protection strategy for trade across the globe. The modern literature suggests that the main cause of growing number of antidumping tariffs is due to the fact that the tariffs have been liberalized. Moreover, there is an acute shortage of provisions which could satisfy and safeguard the products primarily because the antidumping standards are not strong enough. The first legislation which was passed regarding the trade practice of antidumping was passed in the year 1904 in Canada. However, when viewed in the contemporary context, the historical perspective of antidumping initiated when the GATT agreement was formulated in the year 1947. According to the said agreement, the concept of dumping, perceived as a condition wherein the goods produced in one country are launched into another country's commerce at a lesser amount of cost as compared to the normal worth of the goods. Furthermore, the practice of antidumping was made legal provided that the said action would not bring any injury to the goods. But before going deeply into the topic let me first define some of the concepts, which are basic to dumping.

The Dumping Concept

Dumping occurs when a product is sold at less than its normal value. The normal value will usually be the comparable price of the product in the domestic market of the exporting country.

Actual domestic prices do not have to be used when a) sales are not made in the ordinary course of trade (e.g. below cost) b) there is a particular market situation that does not permit a proper comparison c) there is a low volume of domestic sales. When actual domestic prices are not available, or cannot be used, normal value can be based on the export price to a third country or cost of production in the country of origin (plus reasonable amount for selling costs and profit). Export prices may be a constructed' from the first independent price where the importer is related to the exporter. A fair comparison must be made between export price and normal value. Allowances should be made for all differences that affect price comparability.

Types of dumping  

There exist various kinds of dumping. Some of them have been discussed below. The practice of Long-term dumping, in terms of market expansion, is started when the unit costs are reduced because of an increase in output or returns. Also, surplus profitability is gained despite lower rates. When the momentary excess is sold off, intermittent dumping takes ...