Pros

You might also like

Download as docx, pdf, or txt
Download as docx, pdf, or txt
You are on page 1of 2

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.

By eliminating its US competitors, the foreign - owned company would


have full discretion over market pricing.
These kinds of markets distorting actions by companies and governments
destroy healthy competitor. Not only does eliminating domestic
competition come at the expense of US workers and product innovation.
It is also illegal under international trade agreements.

On importing country. There is a negative impact on dumping in


important country because it raises the demand of domestic product and
hands. It reduces the production of domestic goods, which is very
harmful for domestic users. They suffered losses which is not good for
their business and for economic of that country quantity of domestic
goods decreases and foreign goods increase.
Dumping cause devaluation of currency of importing countries, which is
not good for their economic impact of dumping on exporting country
Dumping is very beneficial for exporting countries to reduce the stock
level that country helps to reduce the competition and earn huge amount
of profit clearing the stock to other country by exporting them so stop
dumping because it is only beneficial for exporting country

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.

The issue related to dumping


.such as unfair use of trade-subsidies, strategic use of subsidies as a
background support for predatory-pricing and also for dumping the
products in the market of other countries. What further seems
incompatible with the principles of free trade, is that Member States, by
discarding the WTO objectives, have started reacting in an over-
competitive manner in order to prevail in the market. Taking into
consideration the trade statistics, it is evident that the business firms from
both the Developed and Developing nations, in order to maximize profits
try to out-manoeuvre in the free trading system, by resorting to the trade
practice of dumping or using subsidies for dumping. Such practices have
raised the issue of connection between Subsidies and Dumping for
financial objectives. The issue of interrelationship between Dumping and
Subsidies was raised in the case of United States-Definitive Anti-
Dumping and Countervailing Duties on Certain Products from China,

You might also like