BIZCHINA / Trade
Dumping - Anti-Dumping
(chinadaily.com.cn)
Updated: 2006-10-09 14:58
If a company exports a product at a price (export price) lower than the
price it normally charges on its own home market (normal value), it is
said to be 'dumping' the product.
Dumping can harm the domestic industry by reducing its sales volume and
market shares, as well as its sales prices. This in turn can result in
decline in profitability, job losses and, in the worst case, in the
domestic industry going out of business.
Often, dumping is mistaken and simplified to mean cheap or low priced
imports. However, it is a misunderstanding of the term. On the other
hand, dumping, in its legal sense, means export of goods by a country to
another country at a price lower than its normal value. Thus, dumping
implies low priced imports only in the relative sense (relative to the
normal value), and not in absolute sense.
Anti dumping is a measure to rectify the situation arising out of the
dumping of goods and its trade distortive effect. Thus, the purpose of
anti dumping duty is to rectify the trade distortive effect of dumping
and re-establish fair trade. The use of anti dumping measure as an
instrument of fair competition is permitted by the WTO. In fact, anti
dumping is an instrument for ensuring fair trade and is not a measure of
protection for the domestic industry. It provides relief to the domestic
industry against the injury caused by dumping.
Anti dumping measures do not provide protection per se to the domestic
industry. It only serves the purpose of providing remedy to the domestic
industry against the injury caused by the unfair trade practice of
dumping.
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