Anti Dumping

Before elaborating anti dumping, we need to know about dumping first.

In general terms, dumps mean deposit or dispose (unwanted materials…) typically in a careless way or in a hurried way. Let’s take a general example if we dump unwanted materials into an ocean then surely the quality of water get degraded and it affect directly flora and fauna of ocean and the whole ecological balance get disturbed.

Now come to specific definition of dumping, exporting goods at prices lower than the home market prices. Now if see from trading perspective the local manufacturers which produces the goods which are same as exporting goods may become prey due to unfair trade practice (eg. setting predatory prices) applied by the non domestic firms or manufacturers. And this creates distortion on international trade.

So, to protect domestic industry anti dumping came into existence, but it only does protection when there is a probability of occurring or already occurred unfair trade practices. It is a measure to rectify the trade distortion effect. Basically the main purpose of anti dumping is to reestablish fair trade.

Let’s take again a previous example, once unwanted materials get dump into an ocean then there is a chance of having disturbances in ecological balance, may due to toxicity of materials so to reduce this imbalance we recycle unwanted material or impose heavy duties who create these kind of unwanted materials so they produce these kind of materials less or not even a single bit.

Advantages:

• Anti dumping duty increases the market share of the domestic manufacturers.
• It prevents from domestic industrial injuries (domestic producer).
• It increases the employment rate of locals.
• Dumping causes the domestic production in absolute terms as well in relative terms a steep declination so anti dumping in such case rectify the whole scenario.
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