What is dumping?
The Agreement on the Implementation of Article VI of GATT 1994 stipulates that if a product is exported from one country to another in the normal course of trade, the export price of the product is lower than the comparable price of similar products consumed in its own country, that is, it enters the commercial channel of another country at a price lower than its normal value, then the product will be regarded as dumping.
Elements of dumping
Dumping is the behavior that one country's products enter another country's market at a price lower than the normal value, which damages another country's competitive industries.
Its constituent elements:
1. The product is sold at a price lower than the normal value or fair value;
2. This kind of low-price sales behavior causes damage to the importing country's industry, including material damage, material threat and material obstacle;
3. The damage is caused by low-priced sales, and there is a causal relationship between them.
Dumping usually has the following characteristics:
First of all, dumping is an artificially low-priced sales measure. It means that exporters sell the same commodity at a price difference lower than the market price of related commodities in the exporting country according to different markets.
Second, the motives and purposes of dumping are varied, some are to sell surplus products, some are to compete for foreign markets and expand exports, but as long as it causes substantial damage or threats or obstacles to the establishment and development of an industry in the importing country, it will lead to the punishment of anti-dumping measures.
Third, dumping is an unfair competition. Under the government's policy of encouraging exports, manufacturers often sell their products at low prices in order to obtain government export subsidies; At the same time, producers sell their products in foreign markets at dumping prices, so as to gain a competitive advantage in another country's market and then eliminate competitors, and then raise prices to obtain monopoly high profits.
Fourth, the result of dumping often harms the economy of the importing country or the interests of producers, especially predatory dumping disrupts the market economic order of the importing country and brings a devastating blow to the economy of the importing country.
It should be said that it is reasonable to take anti-dumping measures to stop dumping, but if the implementation of anti-dumping measures goes beyond its reasonable scope or degree, anti-dumping measures will also become a trade protectionist measure and hinder the expansion of international trade. For example, the normal import trade will be hindered by arbitrarily identifying the goods that did not exist in the original dumping as dumped goods, or exaggerating the dumping margin without any basis, thus unreasonably implementing anti-dumping measures or improperly increasing the amount of anti-dumping duties. For example, the dispute between the United States and Canada about imposing special dumping duties on imported potatoes. 1962, due to climatic reasons, the harvest season of agricultural products in the United States was earlier than that in Canada. When American potatoes were on the market in large quantities, Canadian potatoes were not harvested. At this time, it is very suitable for American potatoes to be exported to Canada, and Canada decided to impose a special dumping duty based on the difference between the "normal price" and the export price. The American government thinks that Canada's taxation is a non-tariff barrier and calls on GATT to solve the problem of Canada's anti-dumping duty on imported potatoes. 1963 1.2, Canada cancelled the tax.