Activity No.

3
International Trade and Agreement
Topic: Lesson 3 Trade Barriers
Name: Deanne Lorraine V. Guinto Date Submitted
Course code & Description: BACC6-2 Professor: Mrs. Anna Liza B. Mendiola
International Trade and Agreements

A. Surf the search engines and find out how the anti-dumping law in the Philippines protects
the Filipino exporters against this business practice.
How the anti-dumping law in the Philippines protects the Filipino exporters against this
business practice?
The Philippines has been recognized the importance of placing certain safeguards in the realm
of international trade. Whenever any product, commodity or article of commerce imported into
the Philippines at an export price less than its normal value in the ordinary course of trade for
the like product, commodity or article destined for consumption in the exporting country is
causing or is threatening to cause material injury to a domestic industry or has materially
retarded the growth or prevents the establishment of a domestic industry as determined by the
Tariff Commission. Philippine laws such as Republic Act No. 7843 (the Anti-Dumping Act of
1999) have been enacted in order to align with the general principles provided by the GATT to
combat against unfair trade.

According to the Philippine Tariff Commission, “Dumping occurs when foreign producers sell
their products to an importer in the domestic market at prices lower than in their own national
markets, or at prices below cost of production, the sale or importation of which injures or
threatens to injure a domestic industry producing like or comparable products or retards the
establishment of a potential industry. It is a form of price discrimination between two national
markets.” To occurrence of dumping can be broken down to four simple elements. The first
element of dumping is that there must be like products. There must be a product produced by
the domestic industry which is identical or alike in all respects to the article under
consideration, or in the absence of such a product, another product which, although not alike in
all respects, has characteristics closely resembling those of the product under consideration.
The second element is that there must be a price difference in price. There must be a
discrepancy in the normal value (the price prevailing in the exporting country) which exceeds
the e-port price (selling price to an importer in the Philippines). The third element is that there
must be injury. The word “injury” as provided by the GATT must be construed to mean
material injury to a domestic industry, threat of material injury or material retardation of the
establishment of a domestic industry. Injury test must be based on positive evidence and shall
involve an objective examination of both (a) the volume of the dumped imports and the effect
of dumped imports on prices in the domestic market for like product, and (b) the consequent
impact of these imports on the domestic producers of such products. The last element is that
there must be a Causal Link. The casual link refers to a finding that the material injury
suffered by the domestic industry is the direct result of the importation of the dumped product.
A producer and an exporter or importer are related if the producer directly or indirectly
controls either the exporter or the importer; the exporter or the importer directly or indirectly
controls the producer; a third party directly or indirectly controls the producer and exporter or
importer; or the producer and the exporter or importer directly or indirectly control a third
party and there is reason to believe that the relationship causes the producer to act differently
than an unrelated producer would act.

Source: https://tariffcommission.gov.ph/ra-8751
https://tariffcommission.gov.ph/anti-dumping-duty
https://www.lawphil.net/international/wto/wto_015.html

B. Surf the search engines and read thoroughly on the boycott of Danish products by the
Muslim world. What should the Danish government and exporters do to prevent this
trade war?
Facts about the boycott of Danish products by the Muslim world.
Almost four months after the cartoons were published, the Middle East witnessed a sudden
backlash and outrage. On Friday January 20, 2006, religious clerics all over Saudi Arabia
(during the weekly prayer service) called for the boycott of Danish products as a way to
respond to drawings of the Prophet Muhammad. Within a few days, a massive boycott of
Danish dairy products started in Saudi Arabia over what was perceived as a Western attack on
Muslims’ values. There were fatal riots and demonstrations on the streets, hysterical articles in
newspapers, and emotional emails and text messages calling for a boycott of Danish goods.

Mass emails were sent in January 2006 calling for the boycott of the following Danish
companies and products: ·

 Arla Foods - Milk and dairy products

 Lego Toys/ Jovo Toys
 Dyrup Paints/
 Grundfos Pumps
 Danfoss Pumps
 Linberg Eyeglasses
 Kuwaiti Danish Dairy (KDD)
 Saudi Dairy & Foodstuff Co. (SADAFCO)
 Bang & Olufsen - Music systems and televisions
 Novo Nordisk - Medicine

Danish products, from Lurpak butter to Lego toys, were quickly pulled off the shelves in Saudi
Arabia, Kuwait, United Arab Emirates, Egypt, Oman, Qatar, Algeria, Bahrain, Jordan,
Tunisia, Yemen, and other countries around the Middle East as Muslims awaited an apology
for the cartoons (Elaph, January 30, 2006). In Saudi Arabia, the executive president of the
largest grocery retailer, Al-Othaim Markets, declared “his company’s boycott of Danish
products until that country’s largest daily [Jyllands-Posten] apologizes for publishing 12
cartoons that mocked the Prophet Muhammad” (Hasan & Tago, 2006).
In addition, Al-Othaim’s initiative included a boycott of any supplier who embraced Danish
products. Arla Foods, one of the world's largest producers of dairy products, suffered the most
during the first few days of the boycott. The company’s warehouses were full after customers
in the region cancelled their orders. The Danish company had annual sales of around €350
million or $550 million in the Middle East, and was in the process of opening a major dairy
factory in Saudi Arabia in two weeks.

Source: https://core.ac.uk/download/pdf/268109984.pdf
What should the Danish government and exporters do to prevent this trade war?
Denmark’s foreign economic conditions are changing. The shifting epicenter of the global
economy towards Asia, in particular, has altered Denmark’s international economic
framework. The challenges facing Denmark include the combination of increased competition
in knowledge-intensive sectors, relatively higher production costs and relatively more difficult
access to the growing and distant sales markets.

At the same time, Danish companies increasingly operate within international value chains and
a growing share of Denmark’s economic activity takes place internationally. These are the list
of what Danish government and exporters should do to prevent trade war:

· Raise prices while communicating with your customers.

· Get creative with financing.

· Cut overhead

· Expand other services.

· Finally, explore new markets

C. Further explain why country should imposed trade restrictions?

Why the Philippines should impose trade restrictions?
The Philippines should impose trade restrictions:

· To protect and save domestic jobs

· To protect key defense industries

· To create fair trade

· To raise revenue from tariffs

· To allow new industries to become competitive

· To give an increasing-returns-to-scale industries an advantage over foreign competitors

· Protection from dumping

Surf the net and research on samples of embargoes. Explain why the country should
impose it.

10 EXAMPLES OF TRADE EMBARGOES

1. U.S Sanctions on Nicaragua

2. U.S Sanctions on Russia

3. European Union Sanctions on Russia

4. Canada Sanctions on Venezuela

5. U. N Sanctions on North Korea

6. U.S Sanctions on China

7. U.S Embargo on Cuba

8. EU Sanctions on Sudan

9. U.N Sanctions on Iran

10. U.S Embargo on Japan

A country should impose embargoes because it plays a vital role in International trade. An
embargo is a government-ordered restriction of commerce or exchange with one or more
countries. During an embargo, no goods or services may be imported from or exported to the
embargoed country or countries. Unlike military blockades, which may be viewed as acts of
war, embargoes are legally-enforced barriers to trade. The effectiveness of embargoes is an
ongoing foreign policy debate, but historically, most embargoes fail to achieve their initial
goal.
Source:: https://borgenproject.org/examples-of-trade-embargoes/

https://www.tradecompliance.pitt.edu/embargoed-and-sanctioned-countries