Dumping 7
Dumping 7 : This occurs when goods are exported at a price less than their normal value, generally meaning they are exported for less than they are sold in the domestic market or third-country markets, or at less than production cost. GATT Article VI, which deals with anti-dumping, and countervailing duties, does not actually prohibit dumping. It merely says that GATT parties recognize that dumping is to be condemned if it causes or threatens material injury to an established industry or retards the establishment of a domestic industry in them territory of another member. If enquiries in the importing country show that dumping is taking place and causing material injury to an industry, governments may take anti-dumping measures. Dumping has on occasion been confused with the import of products benefiting from the payment of subsidies. In trade policy, dumping refers to the conduct of individual firms that See: Some advantage in discriminatory pricing arrangements and that finance these from their own resources. Subsidies, on the other hand, are paid, directly or indirectly, to industries by governments. The effect of subsidized and dumped products on the importing market can be the same. International studies have identified four categories of dumping: (a) price dumping for which the rules ultimately appearing in GATT Article VI were made; (b) service dumping, where a price advantage for a product comes about because dumping occurs in the provision of shipping services; (c) exchange dumping, based on manipulation of the exchange rate to achieve a competitive edge; and (d) social dumping, caused by the import at low prices of goods made by prison or forced labour. See: General Agreement on Tariffs and Trade (GATT); Social clause; Social dumping
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