Dumping
Dumping occurs when a foreign exporter sells his or her product in the importing country at a price which is lower than its cost, so that it dumps the ‘like products’ with a higher price in that country. Dumping may take the form of predatory pricing which assumes that the exporter, in addition to selling his product below its cost, intends to destroy his or her rivals either by driving them out of the market or by bankrupting them in order to take control of the market and raise the price of their product. This form of dumping has been considered a criminal offence under the US anti-dumping legislation which has been contemplated inconsistently with the anti-dumping agreement. Dumping may also take the form of intermittent dumping which occurs for a certain period of time (Trebilcock & Howse). Anti-dumping measures have been used more often by WTO members because they are to be imposed discriminatorily i.e. on the exporting country practicing dumping. Canada was the first country to impose anti-dumping measures to protect itself from products exported from the United States of America. Anti-dumping measures have been imposed by developed countries in order to protect themselves from developing countries with infant and newly established industries (Dillon, Trebilcock & Howse). This essay will start off by pointing out the effect of dumping on foreign exporters, consumers, and domestic producers. The essay will then move on to examine the appropriateness of the imposition of anti-dumping measures putting into consideration the fulfillment of the WTO’s objectives.
Part One: The effect of dumping on consumers and producers
While on one hand, dumping is in the benefit of foreign exporters who practice it, as well as consumers, on the other hand, it harms domestic producers whose products have been dumped. Foreign exporters may rely on dumping when they create a new product and would like to promote it, so they export it with a price...