Dumping

The World Trade Organization Agreement on dumping defines it broadly as a company exporting a product at a price lower than the price it normally charges on its home market for a “like” product. When goods are imported at a price below the domestic producer’s price, cries of “unfair competition” and “dumping” are often heard. Pressure is exerted among the countries government to do something to protect their market against the imported products. The government may impose duties to the imported product under three WTO agreements. The Anti-dumping Agreement and The Agreement on Subsidies and Countervailing Measures take action against those importers who are importing at unfair import prices. The third agreement, The Safeguard Agreement, takes action when the import price is fair but the imports are seriously damaging domestic production. Domestic companies can request safeguard action if the market share of imports would otherwise substantially increase. This usually involves the obligation of quantitative restrictions on imports, though these cannot be targeted at a specific country. Anti-dumping provisions, on the other hand, allow nations to retaliate against specific trading partners who are exporting goods a

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When dumping does occur the agreements enacted by the WTO help, the countries that have been dumped on reestablish a situation of open and fair competition. Today there are many countries that dump their products in other countries and this will continue for years to come. In most cases, dumping did occur and the correct measures where taken to halt the illegal practice.

Next, let us get into some examples of actually recent dumping cases involving the United States to help us get a better understanding of the WTO agreements. However, a ruling could take months or even years, so in the meantime US softwood duties remain at 29 percent. Trade Minister Pierre Pettigrew condemned the decision as “obscene” and said Canada would fight the duties through the WTO panels and NAFTA. However as seen in many dumping cases worldwide that is often not the case. Anti-dumping agreements set out a key principle: “anti-dumping measures can only be levied if it is established, after an investigation, that the dumped goods are causing “material injury” to that “industry”. t prices lower than those that thrive in their domestic markets.

When a country believes that goods are being dumped into their country, the first step they can take is to file a formal complaint against the importer. Once the compliant is filed and an investigation underway, the domestic government must find evidence to support their claim, which does require proof of injury and causation, then anti-dumping penalties can be applied for up to five years. This retaliation generally involves charging a compensatory duty to bring the price of a specific good from a specific country back to a "normal" price. This key principle helps control and prevents abuse of the WTO agreements on anti-dumping. The US also maintains that some Canadian producers sell their lumber in the US at below market prices.

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