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Pros
Pros
Pros
The importing country benifit from lower prices. This will save them
money
Dumping can force industries or companies in importing markets to
become to more competitive and innovative if they believe that am being
make it too new for the long term they have no choice but to look for
ways to reduce costror improve quality to differentiate their products. It
also companies to sell backlogs of inventory and products that might
otherwise go to waste
Cons:
Dumping can push producers at manufactures in the importing countries
out of business which can result in loss of jobs and higher unemployment
rates.
Dumping can lead to a company forming a monopoly.
Advantages
The main advantage of dumping is selling at an unfairly competitive lower price. A
country subsidizes the exporting businesses to enable them to sell below cost. The nation's
leaders want to increase market share in that industry. It may want to create jobs for its
residents. It often uses dumping as an attack on its trading partner's industry. It hopes
to put that country's producers out of business and become the industry leader.
There is also a temporary advantage to consumers in the country being dumped upon. As
long as the subsidy continues, they pay lower prices for that commodity
Disadvantages
The problem with dumping is that it's expensive to maintain. It can take years of exporting
cheap goods to put the competitors out of business. Meanwhile, the cost of subsidies can add
to the export country's sovereign debt.
The second disadvantage is retaliation by the trading partner. Countries may impose trade
restrictions and tariffs to counteract dumping. That could lead to a trade war.
The third is censure by international trade organizations. These include the World Trade
Organization and the European Union.