Blackwell Reference Online

Extract

According to the traditional definition, dumping is the practice of price discrimination in international trade, in which the exporter charges a lower price for a specific product in the export market than in his or her home market. International trade law, as embodied in the General Agreement on Tariffs and Trade (GATT) article VI, recognizes two additional definitions of dumping, which can be applied if the exporter's home price is deemed inappropriate as a basis for comparison: 1 charging a lower price for a product in one export market than in another export market; 2 charging a price that does not cover the cost of production, including a “reasonable” addition for selling cost and profit. US international trade law generalizes the definition of dumping as the sale of an imported product at “less than fair value” according to the applicable basis of price comparison. According to gatt rules, if an investigation finds that dumping has taken place and “injures” a domestic industry (see below), the importing country can impose an anti‐dumping duty in the amount of the difference between the export price and the “fair value” price. Viner (1991) was the first to offer a systematic investigation of dumping. For the purposes of economic analysis, the central questions focus on the motivation for and welfare effects of dumping. If an exporting firm with price‐making power has the ... log in or subscribe to read full text