Since its inception, the General Agreement on Tariffs and Trade GATT has authorized signatories to apply duties to offset dumping when it causes, or threatens to cause, material injury to an industry in the territory of a GATT member.
|Protectionism Protectionism represents any attempt that imposes restrictions on trade in goods and services.|
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For example, the United States passed its first antidumping statutes in Despite their longevity, antidumping measures are frequently subject to sharp criticism, especially from academic economists.
Indeed, some observers advocate their complete elimination, raising the question whether dumping itself is a problem sufficiently serious to warrant retention of the antidumping regime provided for under the GATT. This paper notes that antidumping measures, like any complex regulatory regime, may give rise to anomalous or undesirable results in some cases, but argues that dumping itself remains a "problem in international trade," as described by Jacob Viner in his seminal study of the subject.
As such, dumping requires continued regulation, especially for countries with relatively open national markets. As a result, no consensus could be reached on dumping and antidumping issues. This paper outlines why some practitioners believe antidumping measures should be retained as an integral part of national trade policy.
For a contrary view, see Section V, pp. For a summary discussion of the issue, see Box G. Page Share Cite Suggested Citation: Still a Problem in International Trade.
The National Academies Press. Under such circumstances, dumping is a mechanism through which competitive outcomes are determined, in effect by the distortion itself, not the relative competitiveness of individual producers.
In the short run, dumping enables protected firms to run their facilities at higher utilization rates than would be economically feasible in an open market, giving them a major cost advantage unrelated to their comparative cost competitiveness.
Over the long run, dumping can deter investment in the market where it is occurring and, conversely, may well foster increased investment in the protected market. Over time, through such dynamics, dumping may permit an initially less efficient but protected and cartelized industry to displace an equally or efficient competitor, that is, not benefiting from a protected home market.
Because dumping can result in the erosion or destruction of national industries for reasons unrelated to normal market competition, simply permitting dumping to occur without any regulation could endanger the political consensus which supports the current liberal multilateral trading system.
Friction arising out of dumping can become particularly acute when dumping injures or destroys industries regarded as vital to national economic well-being and national security, a phenomenon which has been observable at a number of points in this century.
Fundamentally, the controversy surrounding antidumping is a symptom of a larger phenomenon, the divergence which exists between various national markets with respect to competition policy and which has frustrated all attempts at consensus for at least half a century.
Antidumping measures have been assigned, more or less by default, the task of addressing specific problems created by this divergence. They are admittedly an imperfect tool. But until broader national differences with respect to competition policy are reconciled, these measures remain essential to the world trading system, acting, in the words of John Jackson, as an "interface mechanism The legal underpinning of this system is provided by the General Agreement on Tariffs and Trade GATT and its ancillary agreements and codes, currently administered by the newly formed World Trade Organization.
The GATT has made possible the progressive liberalization of world trade through the basic mechanism of binding commitments by signatories to reduce trade barriers on a most-favored-nation basis.
The GATT has survived, however, in significant part, because its framers were wise enough to recognize that the system would not be sustainable in the absence of certain exceptions to the general com- Page Share Cite Suggested Citation: These exceptions, which include "escape clause" provisions, special rules for developing countries, and antidumping and countervailing duty measures, have functioned as interface mechanisms to soften the dislocations that have occurred as the reduction in border restrictions has brought differing national economic systems into progressively closer competitive contact.
Without the existence of these mechanisms, given the politically sensitive subject of international trade. It is often overlooked that the most active users of antidumping measures have been GATT members with the more open markets—countries such as Australia, Canada, the European Union, and the United States.
As a number of newly industrializing nations liberalize their trade regimes, they are becoming more active in applying antidumping measures.
Antidumping policy is now the subject of scathing attacks from many quarters, including prominent figures in law, business, and academia. Michie Company,p. Down in the Dumps: The Brookings Institution, One might ask why laws so odious have not been quickly repealed.
This has not occurred in the United States at least, according to some critics, because of "lobbying" by "protected U. Apart from a few obscure monographs and articles, little has been published defending the rationale for antidumping policy since Professor Jacob Viner, one of the draftsmen of the original U.
Although antidumping measures can be, and sometimes are, applied in an arbitrary, irrational, or unnecessarily burdensome manner, the same can be said of any major regulatory program or system of legal redress, and such problems do not, by themselves, constitute a basis for 7 Claude Barfield, "Dumping Know-Nothingism," Journal of Commerce March 18, Martin's Press,p.
By far the majority of practitioners of antidumping law in Washington represent foreign firms seeking to avoid the imposition of antidumping duties. Many of them have been vocal in criticizing the antidumping law, and if the "international trade bar" were polled on the subject, it is likely that a majority would support repeal of the law.Eu to Impose Anti-Dumping Tariffs on Chinese Solar Panels.
Commentary: EU to impose anti-dumping tariffs on Chinese solar panels.
Free trade versus protectionism is a topic . Sep 14, · According to research, "solar power panels generate zero CO2 emissions," (Simple Earth Media ).
Thus, more focus on the implementation of solar power would drastically reduce the harmful gases being emitted into the atmosphere by traditional power sources. That designation provides the legal basis for many of China’s trading partners — most notably, the EU, Japan, and the United States — to impose anti-dumping duties on Chinese goods like.
Jul 26, · If the EU really believed in Climate Change, they would not impose high tariffs on the importation of Chinese Solar panels. If Climate Change is truly the biggest threat we face, the EU would welcome the importation of cheap Chinese solar panels so that as many EU citizens as possible could afford to go solar.
Commentary: EU to impose anti-dumping tariffs on Chinese solar panels. Free trade versus protectionism is a topic of great debate in internal economics. The former takes place when there are no barriers to trade established by the government or international organizations.
Dumping is the export of products at less than "normal value," often defined as the price at which those products are sold in the home market.