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A Critical
Bulletin of Toyohashi Sozo
JuniorEvaluation
Collegeof Dumping IN INTERNATIONAL TRADE（澤上）
2001, No. 18, 133– 145
133
研究ノート
A Critical Evaluation of Dumping
IN
INTERNATIONAL TRADE
Shigemi Sawakami
B. Hypothesis
1. INTRODUCTION
Dumping is an unfair trade practice.
Therefore, it entails antidumping measures by
developing and growing perpetually for the
the dumped country. What effects do
benefits of both companies and countries and
antidumping measures have on a dumping
for the welfare of people across the world.
country? Do antidumping measures have any
International Trade must be carried on
impact on the domestic country? To test these
smoothly and peacefully. Unfair trade
questions, the following hypotheses are
practices like dumping and antidumping
presented;
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International Trade must be kept
measures pose a great threat to the
H1: The impact of antidumping duties on
development of International Trade. Further,
the domestic country is higher taxes
they have been continuously increasing in
on these imports.
H2: The impact of antidumping duties on
number, since first observed in the nineteenth
the dumping country is decreased
century. Why?
exports.
A. Purpose of Study
C. Significance
This paper aims at (1) defining dumping,
(2) revealing its motives, and (3) studying its
History shows that in the late nineteenth
countervailing measures. In view of the fact
century there was a tremendous temptation in
that dumping occurs in international trade, the
the U.S., whenever business was dull, to cut
paper also presents overviews of international
prices in order to bring in some revenues, even
agreements on dumping and the relevant
if they were not enough to make a profit
domestic laws of each individual country.
(Heilbroner, 1865).
Finally, the possibility of eliminating all
Suppose this is the beginning of
dumping practices from international
“dumping”, it became more and more popular
transactions will be discussed to conclude the
as time went on with the progress of the world
paper.
economy. According to the World Trade
Organization’s report, 1,157cases of dumping
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豊橋創造大学短期大学部研究紀要 第 18 号
occurred across the world from the beginning
International Trade Commission, Ministry of
of 1990 to the end of June, 1996 (Ministry of
International Trade and Industry, Japan, and
International Trade and Industry, Japan, 1998) .
the World Trade Organization.
Dumping is an unfair trade practice by
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competitors out of their markets. Besides, it
“Jacob Viner (1923), the first scholar to pull
allows the dumped country to take protective
together precious writing on the subject, notes
measures; the dumped country imposes
a sixteenth century English writer who charged
exorbitant tariffs or countervailing duties on
foreigners with selling paper at a loss to
the imports from dumping countries to protect
smother the infant paper industry in England”
its industry from such dumping.
(Finger, 1996: 13–14).
Does dumping tend to increase along with
According to the General Agreement on
the development of the world economy? Does
Tariffs and Trade (GATT), dumping is defined
free trade stand on the balance of power
as the price of a product exported from one
between unfair trade and countervailing
country to another in less than the comparable
measures? Is it possible to eliminate dumping
price for the like product when destined for
practices from international trade? A thorough
consumption in the exporting country (Hindley,
examination on these issues and in-depth study
1996).
of International Agreements on dumping
T. E. Gregory, an English economist, points
hopefully will reveal the mechanism that
out that the term “dumping” is used at one time
underlies the unfair trade and protectionism.
or another to cover all the four following
This paper should contribute to foreseeing
practices: (1) Sale at prices below foreign
what and how international trading practices
market prices, (2) Sale at prices with which
should be, in order to sustain continuous, stable
foreign competitors cannot cope, (3) Sale at
growth of the world economy.
prices abroad which are lower that current
home prices, (4) Sale at prices unprofitable to
D. Sources of Data
the sellers (Viner, 1996, 3).
The Duane G. Meyer Library of Southwest
In summary, “dumping” implies price-
Missouri State University was used to acquire
discrimination between national markets.
various books, journals, governments’
Therefore, selling products at a lower price in
documents, etc. As to the books and journals,
foreign markets than the price of the like product
those written by theorists, researchers, and ex-
in a domestic market constitutes dumping.
governments’ officials specializing in
F. Plan of Presentation
antidumping policy, were purposefully
selected. Governments’ and other public
Part II describes why companies dump and
documents were collected by way of Internet
what impact antidumping measures have on
and microfilm. They were of the U.S.
both the home and foreign countries. This
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E. Definition
exporters because dumping aims at forcing
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A Critical Evaluation of Dumping IN INTERNATIONAL TRADE（澤上）
135
chapter also gives an insight into the issue of
raise prices afterward. But why do they resort
whether dumping can be stopped. Part III
to dumping? GREG MASTEL classified the
discusses “dumping” and “antidumping” from
motivations of dumping into four categories
a global perspective. First, it shows how each
in American Trade Laws after the Uruguay
country deals with antidumping measures.
Round: (1) over-capacity dumping, (2)
Secondly, it examines how the World Trade
government-support dumping, (3) tactical
Organization (GATT) copes with these issues.
dumping (discriminatory pricing), and (4)
Thirdly, an assumption is given as to whether
predatory dumping (p. 77–84).
or not the world will be free from “dumping”
Over-capacity dumping occurs when a
and “antidumping”. Part IV presents the
company continues producing and selling at a
conclusions of the study focused mainly on
price lower than the average cost of
(1) whether dumping will be stopped, (2) what
production, trying to recoup at least fixed costs.
each country should do, and (3) what role the
Government-supported dumping is perceived
World Trade Organization should play.
when the government supports a particular
industry by providing subsidies. Supported
by the government’s subsidies, the firm in the
II. DUMPING AND
ANTIDUMPING
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the production costs. Agricultural products,
Why do companies dump? Can dumping
for example, are often dumped in this way.
practices be stopped? Why and how are
Tactical dumping is the practice of selling
antidumping measures taken? What impact
the same product in different markets at
do they have on the dumping country and on
different prices. It works best if a company’s
the dumped country?
Dumping and
home market is closed to imports. With a
antidumping practices are reciprocal actions
closed home market, the company can charge
that occur between dumping and dumped
high prices at home and generate high profits,
countries. But they have one thing in common:
which offset sales at a loss in foreign markets.
both lead to protectionism, which is an
Predatory dumping aims at eliminating the
impediment to the development of the global
competition with the objective of gaining
economy. This chapter deals with the above
exclusive control of the market. It is an
issues in detail and therefore forms a major
extreme form of discriminatory pricing in that
part of this paper.
it pursues monopolizing a market. This
dumping practice is most likely to cause a
A. Dumping Practices
destructive injury to the dumped country.
Dumping is one of the commercial tactics
Whether it is called “dumping” or
employed by companies trying to expand their
“discriminatory pricing”, low-cost pricing is
market into foreign countries or force
a marketing strategy aimed at market entry or
competitors out of foreign markets in order to
eliminating competitors’ operations by using
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industry can sell their products at a price below
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豊橋創造大学短期大学部研究紀要 第 18 号
profits generated in a closed home market or
to open closed markets: antidumping is part
with the help of government’s subsidies. The
of the strategy to promote open markets,
company must be a going concern with profit
expand trade, and put an end to mercantilism
maximization as one of its supreme objectives.
and protectionism in order to develop an open
When the company takes low-cost pricing as
and competitive global trade system.
a competitive advantage, nobody has the right
“There are three types of antidumping
to prevent the company from resorting to that
measures: antidumping duties, countervailing
strategy in free markets. However, it is also
duties, and voluntary export restraints.
true that sales in foreign countries at a price
Antidumping duties are levied, subject to
less than the cost of production almost always
antidumping laws designed to combat unfairly
cause quite an embarrassing effect to those
traded imports. The dumped country imposes
countries. The next section deals with this
offsetting duties on imported products that are
issue in great detail, showing how the dumped
sold at prices below those in their home market
countries react to dumping and what its effect
or below the cost of producing the product.
is.
While antidumping laws are targeted at
countering predatory pricing of imports,
countervailing duties aim at balancing the
There are several reasons for antidumping
effect of foreign government subsidies by
measures. Antidumping is necessary to
imposing offsetting duties.
prevent exporters from charging prices so low
“Voluntary Export Restrains (VER) are a
that domestic competitors are driven out of
kind of agreement between the exporting
business. Dumping is a tactic employed by
country and importing country that the
predatory exporters seeking a monopoly in
importing country will not impose
foreign markets. Antidumping duties are
antidumping tariffs on the products from the
preemptive measures against such predatory
exporting country on condition that the
exporters. Antidumping measures are used as
exporting country will achieve the reduction
barriers against unfair trade. If dumping
in exports requested by the importing country”
threatens domestic producers with less than
(MASTEL, 1996: 71:109:131).
mortal injury, they should be protected from
Consumers have to pay more than they do
unfair foreign competitors.
when cheap imports are available.
Antidumping measures provide a remedy
Besides, their choices of goods are limited
f o r f o r e i g n m a r ke t - a c c e s s b a r r i e r s :
when imports are restricted. Companies
antidumping is to counter unfair trade
whose products consist of imported parts or
strategies by foreign countries, further, to break
components face increase in production costs.
down market-access barriers, because the
Their competitiveness decreases at home and
protected home market is a basis used to
abroad. Governments are charged with
support dumping. They also form strategies
protectionism and face retaliatory measures by
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B. Antidumping Measures
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A Critical Evaluation of Dumping IN INTERNATIONAL TRADE（澤上）
137
maintain a good relationship.
exporting countries: high import duty, ban on
their exports to those dumping countries.
Case Study on Antidumping Measures
According to the House of Representatives,
The following two cases are cited from
Committee on Ways and Means, an
Finger J.M. (1996: 83–100);
antidumping action was brought and the
and fight the case, but rather it simply stopped
Case 1. Impact on the domestic country:
selling its products to Americans in the United
More than 94% of the U.S. imports of frozen
States. U.S. companies that needed the
concentrated orange juice came from Brazil
products relocated their manufacturing
during the 1980s. Responding to the petition
operations to places outside the United States
filed by Florida Citrus Mutual, an association
and kept right on producing for the world
of orange growers, the U.S. Commerce
market. American consumers were denied the
Department imposed 2.655% of import deposit
benefits of competition from the imported
on all imports from Brazil. An estimated 80%
items (April 23, 1996).
of Brazilian shipment of frozen concentrated
Consumers either gain or lose. Because
orange juice to the United States was
of their market being closed to imports of the
consumed by manufacturers such as Coca-
like product, they are unable to get cheaper
Cola, Procter & Gamble, Tropicana, and
imports. But when manufacturers lower the
Pasco. An antidumping measure, in this case,
price at home to dissolve the price
resulted in losses on the part of the United
discrimination, consumers get benefits.
States in the forms of higher production costs
Companies (manufacturers) have serious
and higher prices for consumers.
problems. They would be unable to dispose
of surplus inventory, if the dumping were
Case 2. Impact on the foreign country: The
surplus dumping. They have to reduce
Korean electronics industry benefited from the
production or close part of production
government’s direct subsidies, tax exemptions,
facilities, in case other markets for the product
and low-interest rate loans. It was the sixth
can not be found. Otherwise, they may be
largest electronics producer in the world in
forced to lower prices.
1988. Import restrictions, supported by the
Governments need to take retaliatory
ban on foreign producers of consumer
actions against the importing countries: high
electronics in Korea, protected the market
import duties, restriction or ban on imports
position of the Korean big three manufacturers
from the dumped countries. Governments are
and allowed them to maintain high internal
forced to reduced or get rid of the subsidies
prices, well above the competitive level they
on manufacturers. Besides, acceptance of
must match in international markets. But when
request for voluntary export restraints from the
the United States imposed antidumping duties
importing country may be unavoidable to
(52.5%) on imports of Korean color television
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respondent company chose not to hire lawyers
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豊橋創造大学短期大学部研究紀要 第 18 号
sets in 1983, Korean prices of the same product
both are rooted in the closed market.
began to fall: by 1985 they were 19% below
International markets must be opened,
their level in 1983. However, antidumping
liberalized for the growth of the world
charges against imports of Korean electronics
economy.
products sometimes ended with negotiated
U.S. International Trade Commission
voluntary export restraints. Spurred by foreign
i n d i c a t e s t h a t t h e b e n e fi t s o f t r a d e
pressures and by the realization that economic
liberalization are greater than generally
growth required greater openness, Korea began
appreciated. It says that moves toward free
to carry out a broad and ambitious trade
trade mean not only the one-time benefit of
liberalization program in 1980.
lower prices for consumers and greater market
opportunities for exporters; they induce,
through direct and indirect channels, more
rapid economic growth over the long run (U.S.
Are there lessons to be learned from these
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cases against Brazilian firms had little direct
Can antidumping measures be controlled?
impact on output or price levels. The
This question comes from the notion that
foolishness of these unfair trade actions is
antidumping can easily degenerate into
particularly evident from their impact on its
protectionism, and protectionism must be
supposed beneficiaries: the U.S. citrus industry
abolished because it impairs the development
and consumers.
of the world economy. What is the purpose of
Case 2 indicates that antidumping actions
protectionism? The answer is that countries
by importing countries do not protect their
need to protect their infant industry from
consumers. If U.S. producers will push for
foreign competition. The problem lies in the
negotiated export restraints, such restraints
point that people think antidumping equals
would not only raise costs to U.S. consumers,
protectionism. Antidumping is so much a
but by removing the incentive for Korean
tactic to cope with dumping as protectionism.
companies to set lower prices at home, would
So long as dumping exists, a country has the
impose a burden on Korean consumers as well.
right to take antidumping measures, not
Korea, however, learned a lesson that the
protectionism. Dumping is a low-pricing
economic development could be sustained
strategy within the realm of normal marketing
only in parallel with a greater opening of its
strategy. However, if a company resorts to this
market.
strategy, aiming at forcing competitors out of
But the greatest lesson the two cases
the market (predatory pricing), nobody agrees
provide is that dumping practices and
with the country. Difficulty lies in a technical
antidumping measures both produce nothing
issue—judgement—to determine whether
good for either the dumping country or the
low-pricing is dumping or not.
For the development of the world economy,
dumped country. Dumping and antidumping
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International Trade Commission, 1997).
two cases? Case 1 shows that unfair trade
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A Critical Evaluation of Dumping IN INTERNATIONAL TRADE（澤上）
139
it is important for free and fair trade to be
knowledge that they are necessary evils. There
maintained. It is also important for the
is a great diversity in market development in
globalization of the economy that harmony and
the world: developed, developing, and
welfare among each individual country across
underdeveloped markets.
the world should not be left behind.
development in a harmonious, orderly manner
International cooperation plays a critical role
of each individual country is essential for
in maintaining the balance between dumping
continuous, stable growth of the world
and antidumping activities in good,
economy and for world peace as well.
harmonious order.
International cooperation plays a critical role
Economic
in adjusting and balancing the interests of each
C. Summary
individual nation. International agreements on
Dumping is one of marketing strategies.
dumping and relevant domestic laws of various
It is used to develop a new market, expand
countries will be studied in the next chapter.
market share, and sometimes force competitors
out of foreign markets. There are various
III. INTERNATIONAL
AGREENMENTS
reasons that motivate companies to dump their
whatever the reasons may be, one thing is
The measures against unfair trade practices
clear: dumping is an unfair trade practice.
were briefly explained in the previous chapter
Antidumping measures stand on various
as “Types of Antidumping Measures”. In this
reasons: protection of home industry,
chapter the focus is on how each country enacts
preemptive measures against monopolism,
the relevant laws. But before getting into
barriers against unfair trade, remedy for
individual countries’ laws, a brief explanation
foreign market-access barriers, and strategy to
of antidumping and countervailing duty laws
open closed markets. Antidumping measures
is given in order to help better understand the
consist of three different types of remedies:
overall unfair trade practices around the world.
antidumping duties, countervailing duties, and
A. Antidumping and Countervailing
Duty Laws
voluntary export restraints. All of them have
a tendency to degenerate into protectionism.
Antidumping measures have impact on home
Governments enact antidumping laws and
countries as well as on foreign countries. They
impose antidumping duties to provide relief
tend to give a great benefit to consumers in
to domestic industries injured by competition
foreign countries, and little benefit to
from imports sold at prices lower than the
consumers in home countries.
selling price in the exporting country. Such
Dumping and antidumping measures both
goods are referred to as being “dumped”, and
have good reasons for their existence as
such sales are known as “injurious dumping.”
marketing strategies. But it is universal
The injurious effects of the dumped goods may
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products in foreign markets. No matter
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140
豊橋創造大学短期大学部研究紀要 第 18 号
be offset by means of antidumping duties
world, and still only 40 of them have
levied at the time of import. The upper-limit
antidumping laws. This clearly shows that
of an antidumping duty is determined by the
understanding and awareness of unfair trade
dumping margin—the difference between the
practices in the world have been far behind
export price and the domestic selling price in
the progress of the global economy. The
the exporting country (Ministry of International
United States has always taken the lead in
Trade and Industry, Japan: 223508e).
formulating optimal antidumping and
Subsidies have been provided widely
countervailing duty laws in order to maintain
throughout the world in such forms as grants
fair trade practices and to open closed foreign
(normal subsidies), tax exemptions, low-
markets, thus contributing to the development
interest financing, investment and export
of international trade. In this section,
credits, as a tool for realizing government
antidumping and countervailing duty laws of
policies. Although governments articulate
the U.S., Canada, and European Community
ostensibly legitimate goals for their subsidy
are discussed.
programs, it is widely perceived that
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protection to domestic industries. Exports of
The United States has two laws to combat
subsidized products may injure the domestic
unfairly traded imports: Antidumping Laws
industry producing the same product in the
and Countervailing Duty Laws. Antidumping
importing country. Countervailing duty laws
Laws are targeted at countering predatory
are enacted to offset the effect of the subsidy
pricing of imports, while Countervailing Duty
by imposing a countervailing duty (limited to
Laws offset the effect of foreign government
the amount of the subsidy) on the import of
subsidies. Both laws are administered by a
subsidized goods (Ministry of International Trade
two-step process: the U.S. Commerce
and Industry, Japan: 223509e).
D e p a r t m e n t ’s I n t e r n a t i o n a l Tr a d e
A d m i n i s t r a t i o n ( I TA ) a n d t h e U . S .
B. Antidumping and Countervailing
Duty Laws around the world
International Trade Commission (ITC). An
antidumping and countervailing duty
Robert Rogowsky, Director of Operations,
investigation begins when the Government
U.S. International Trade Commission, says,
receives a petition from a domestic industry
“Back in 1980, only about 10 countries had
alleging that imports are being dumped or are
antidumping laws like the United States, but
benefiting from a subsidy. Antidumping Laws
today, there are about 40 countries. In these
work this way: the ITA determines if dumping
countries, the primary target of antidumping
is taking place, assigns offsetting duties
cases have been U.S. exporters” (House of
(dumping margins), and administers
Representatives, 1996).
suspension agreements. The ITC determines
if dumped imports are a source of “injury” to
There are more than 150 countries in the
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The United States
government subsidies may give excessive
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141
competitive domestic industries, then issues
dumping or subsidy is made by the Assessment
its final decision on injury, at which it may
Programs Division of the Department of
take into account not only present injury but
National Revenue, Customs, and Excise. The
also the imminent threat of future injury based
determination of material injury to domestic
on such factors as rapid growth in imports and
production is made by an independent, quasi-
the size of the Commerce Department’s
judicial body: the Canadian International
suggested margin.
Trade Tribunal. A dumping or subsidy
As to Countervailing Duty Laws, the ITA
investigation typically begins in response to a
determines whether or not the imported
complaint registered with the Department by
product in question is subsidized. The ITC
a domestic producer or several producers.
determines whether the product is imported
After an affirmative final determination by the
in sufficient quantities to result in material
Department, the Trade Tribunal enters the
injury to U.S. interests, poses an imminent
decisive phase of its injury deliberations with
threat of material injury to the industry, or
a formal hearing. The Tribunal’s decision is
materially retards the establishment of a
final. A finding of injury generally requires
domestic industry. If the ITA decides that a
the elimination of the full margin of dumping
countervailable subsidy exists, the ITC makes
or the level of subsidy determined by the
its final decision and a duty is imposed after
Department (Finger, 1996: 203–206).
the ITC’s final decision (MASTEL, 1996).
The European Community
Canada
Antidumping laws are the primary
Canada was the first country to institute
instrument of protectionism in the European
an antidumping system (1904). Canada’s
Community. The application of antidumping
antidumping and countervailing duty
laws depends more on administrative and
legislation underwent major revision in the
political consideration than on technical
1980s. The imposition of antidumping and
determinations. The fairness or unfairness of
countervailing duties in Canada is governed
foreign trade practices is part of the rhetoric
by the Special Import Measures Act (SIMA)
of EC trade policy. The primary motivation
of 1984. SIMA was designed to overhaul
of antidumping measures is preventing injury
previous legislation and to make Canada’s
to politically influential domestic products.
legislation more effective in protecting
The European Community’s antidumping
Canadian producers from dumped or
regulations are not based on any economic
subsidized imports. SIMA contains a two-
notion of dumping but on the GATT
track system for resolving domestic
Antidumping Code. Antidumping is the
complaints of dumping and foreign
European Community’s frontline defense
government subsidies.
against imports, but not all countries have been
The administrative determination of
equally deterred by antidumping measures.
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豊橋創造大学短期大学部研究紀要 第 18 号
Japan, Eastern European countries, and a few
members. The international organization that
developing countries including China, Korea,
preceded it was the General Agreement on
Taiwan, and Yugoslavia have been the targets.
Tariffs and Trade (GATT), which deals with
A dumping investigation has three possible
trade in goods, and has the provisions for anti-
outcomes: the rejection of the claim, the
dumping and subsidies and countervailing
levying of an antidumping duty, or the
measures. The present rules on antidumping
negotiation of a voluntary price increase with
measures are a result of the Uruguay Round
the party accused of dumping. The average
negotiations (1986–1994). The Uruguay
ad valorem (duty imposed at a percentage of
Round version is part of the WTO agreement
the value) equivalent of antidumping measures
and applies to all members.
between 1980 and 1985 was 23 percent, with
Antidumping measures: if a company
peaks at 50 percent or more. Imports of
exports a product at a price lower than the price
products subject to antidumping investigations
it normally charges on its own home market,
have fallen on average to half their initial level
it is said to be “dumping” the product. Is this
within five years of initiation of an
unfair competition? The WTO agreement does
investigation (Finger, 1996: 221–236).
not pass judgement. Its focus is on how
C. International Agreements
It disciplines antidumping actions, and it is
Some countries have their own laws to
often called the “Anti-Dumping Agreement.”
combat unfair trade practices from foreign
The WTO agreement allows governments to
countries. Since these laws are designed to
act against dumping where there is genuine
cope with international trade disputes, they
“material” injury to the competing domestic
need to have something in common across the
industry. In order to do that, the government
world. The World Trade Organization (WTO),
has to be able to show that dumping is taking
commonly referred to as the world trading
place, calculate the extent of dumping (how
system, provides the definition for dumping
much lower the export price is, compared to
and countervailing activities, and guide-lines
the exporter’s home market price), and show
to take counter active measures against unfair
that the dumping is causing injury.
trade partners. The U.S., EC, Canada, and
Subsidies and countervailing measures:
other countries have been modifying their laws
agreement on subsidies and countervailing
to conform to the spirit of the WTO.
measures does two things. It disciplines the
The World Trade Organization (WTO) is
use of subsidies and regulates the actions
an international agency whose purpose is to
countries can take to counter the effects of
help trade flow as smoothly as possible in a
subsidies. A country can use the WTO’s
system based on rules, to settle trade disputes
dispute settlement procedure to seek the
between governments, and to organize trade
withdrawal of the subsidy or the removal of
negotiations. By May 1997, it had 131
its adverse effects (GATT, 1998)
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governments can or cannot react to dumping.
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A Critical Evaluation of Dumping IN INTERNATIONAL TRADE（澤上）
E. Summary
In recent years, there has been an emerging
trend in the development of regional trading
Countries that participate in international
arrangements: regional trade blocs. EU,
trade have some kind of antidumping and
NAFTA, and ASEAN are the largest and most
countervailing duty laws. These laws are more
influential trading blocs to countries outside
or less designed to comply with the GATT,
the blocs. They are most likely to erect barriers
now the WTO, whose purpose is to help trade
against foreign competitors while limiting their
flow as smoothly as possible in a system based
membership: bloc protectionism. Therefore,
on rules, to settle trade disputes between
the most important issue for international trade
governments, and to organize and facilitate
is to ensure that existing and future regional
trade negotiations. However, in recent years
arrangements should be designed to be GATT-
there has been an emerging trend in the
consistent in both letter and spirit (Geiger, 1996).
development of regional trading arrangements:
D. Will a world free from “DUMPING
AND ANTIDUMPING” come true?
against foreign competitors while limiting their
Dumping strategy works when exporters’
transforming into managed markets, and
home market is closed to imports and when
therefore, a world free from “dumping and
governments’ subsidies exist. Companies
antidumping” activities is far away.
membership. The whole world seems to be
pursuing a dumping strategy build up profits in
a closed home market in order to support foreign
IV. SUMMARY AND CONCLUSIONS
dumping. Governments need to subsidize infant
A. Summary
industry or industry vulnerable to foreign
competition. In reality, a world perfectly free
General Agreement on Tariffs and Trade
from trade barriers and government subsidies
(GATT) defines dumping as the price of a
does not exist. Therefore, it is a foregone
product exported from one country to another
conclusion to say that a world free from
in less than the comparable price for the like
dumping and antidumping protection will come
product when destined for consumption in the
in the future. However, the benefits of trade
exporting country.
liberalization are greater than generally
classified the motivations of dumping into four
appreciated. Moves toward free trade mean not
categories: (1) over-capacity dumping, (2)
only the one-time benefit of low prices for
government-support dumping, (3) tactical
consumers and greater market opportunities for
dumping(discriminatory pricing), and (4)
exporters; they induce, through direct and
predatory pricing. The company must be a
indirect channels, more rapid economic growth
going concern with profit maximization as one
over the long run (U.S. International Trade
of its supreme objectives. When the company
Commission, 1997).
takes low-cost pricing as a competitive
GREG MASTEL
advantage, nobody has the right to prevent the
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regional trade blocs. They erect barriers
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144
豊橋創造大学短期大学部研究紀要 第 18 号
against foreign competitors while limiting their
company from resorting to that strategy.
membership: bloc’s protectionism.
Companies take antidumping measures for
five reasons: (1) protection of infant industry
Dumping strategy works only when
from foreign competition, (2) preemptive
exporters’ home market is closed to imports
measures against monopolism, (3) barriers
and when governments’ subsidies exist.
against unfair trade, (4) remedy for foreign
Companies pursuing a dumping strategy build
market-access barriers, and (5) strategy to open
up profits in a closed home market in order to
closed foreign markets. There are two kinds
support foreign dumping. Governments need
of antidumping measures: antidumping laws
to subsidize infant industry or industry
and countervailing duty laws. Antidumping
vulnerable to foreign competition. In reality,
laws are designed to combat unfairly traded
a world perfectly free from trade barriers and
imports while countervailing duty laws aim at
government subsidies does not exist.
balancing the effect of foreign government
Therefore, it is a foregone conclusion to say
subsidies by imposing offsetting duties. These
that a world free from dumping and
antidumping measures have impact not only
antidumping practices will come in the future.
on foreign countries but also on domestic
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cope with dumping as protectionism. So long
When I first thought of studying
as dumping exists, a country feels it has the
“dumping”, my whole idea was that dumping
right to take antidumping actions.
was a trouble maker as well as an unfair trade
Today no more than 40 countries have
practice in international trade, embedding the
antidumping laws, though there are no less
possibility of leading to a trade war. But as
than 150 countries in the world. The United
the study went on, I found that antidumping
States has always taken the lead in formulating
measures were also unfair trade practices, no
optimal antidumping and countervailing laws,
less than dumping. Besides, it is clear that
in order to maintain fair trade practices and to
antidumping measures have an impact on both
open closed foreign markets. WTO provides
dumping and dumped countries. Therefore,
a definition for dumping and countervailing
Hypothesis 1 and 2 both have been proven true.
activities, and guide-lines to take counteractive
Here, my focal point of the study shifted to
measures against those countries that resort to
the issue of whether eliminating unfair trade
unfair trade practices.
practices and so cutting trade barriers really
In recent years, there has been an emerging
would cause economic growth. It is said that
trend in the development of regional trading
countries that participate in international
arrangements, regional trade blocs. EU,
markets enjoy more rapid economic growth.
NAFTA, and ASEAN are the largest and most
For example, growth rate per capital income
influential trade blocs to countries outside the
in East Asian economies have dramatically
blocs. They are most likely to erect barriers
exceeded those in Latin America and Africa
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B. Conclusions
countries. Antidumping is so much a tactic to
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A Critical Evaluation of Dumping IN INTERNATIONAL TRADE（澤上）
145
for a period of several decades. A key
and antidumping measures, the advent of a
component of this growth has been strong
world free from unfair trade practices may be
export performance. In the formerly
premature. But fair and orderly trade practices
Communist economies of Eastern Europe and
are indispensable for a continuous, harmonious
the Soviet Union, those economies adopting
growth of the world economy. In this regard,
market-oriented reforms early—Poland,
it is the World Trade Organization that is most
Hungary, and the Czech Republic—have
expected to play a more aggressive role in
enjoyed a more rapid return to growth (U.S.
opening closed markets, eliminating unfair
International Trade Commission, 1997).
trade practices, and contributing to the
Understanding trade’s contribution to
realization of truly free international trade.
growth is important because even relatively
No less important than the role of the WTO
modest changes in the rate of economic growth
are those of each individual country and
can have dramatic consequences for standards
regional blocs. They are strongly required to
of living over a generation or two, as seen
act in conformity with the guide-lines of the
above. Thinking of the current international
WTO.
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REFERENCES
1. Finger J.M., ANTIDUMPINHG: How It Works and Who Gets Hurts, The University of Michigan
Press, 1996
2. GATT PROTOCOL February 22, 1998, Internet: http://itl.ir4u.no/trade-law/documents/freetrade/wta94/art/ita1 a2.html
3. Geiger T., Kennedy D., Regional Trade Blocs, Multilateralism and GATT: Complementary Paths to
Free Trade, Biddles Ltd., London, 1996
4. Heilbroner R., Singer A., The Economic Transformation of America Since 1865, Harcourt Brace &
Company
5. Hindley B., Messerlin P.A., ANTIDUMPING INDUSTRIAL POLICY, The AEI Press, 1996
6. House of Representatives, Committee on Ways and Means, Department of Commerce Proposed
Antidumping Regulations and Other Antidumping Issues, April 23, 1996
7. Ministry of International Trade and Industry, Japan, Internet:www.miti.go.jp, February 8, 1998
8. MASTEL G., American Trade Laws after the Uruguay Round, ME. Sharpe, Inc., 1996
9. Ministry of International Trade and Industry, Japan, Antidumping Measures, Internet http://www.miti.go.jp/
intro-e/a223508e.html
10. Ministry of International Trade and Industry, Japan, Subsidies and Countervailing Measures, Internet:
www.miti.go.jp/intro-e/a223509e.html
11. U.S. International Trade Commission, The Dynamic Effects of Trade Liberalization: An Empirical
Analysis, 1997
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trade that is in a pendulum between dumping