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Impacts on international trade
countries are shortage of foreign currencies, they may foster export by lowering goods prices. However, dumping may happen beyond the control of
producers, exporters in some cases, for instance: bottle-neck, supply exceeds demand, damageable inventory, etc.; they have to sell goods at lower prices to
recover their capital.
In short, there are many purposes to dump, but whatever purposes they have, dumping still causes bad effects on importing countries, others nations,
and international trade.
1.1.2. Impacts on importing countries and international trade 184.108.40.206. Impacts on importing countries
Nowadays, dumping activities are becoming popular in the context of international trade. Eliminating fair competition to break into markets,
dumping has turned into an obstacle against the trend of trade liberalization. In the short term, consumers gain benefit from dumping because of cheap price.
However, this is an unfair competition activity; it can seriously damage domestic production of importing countries in the long term. As a result,
nations around the world try to fight against dumping in an attempt to prevent or minimize dumped goods on their markets in case the imports of that type of
goods have caused or threaten to cause damage to a substantial part of the domestic industry.
220.127.116.11. Impacts on international trade
In the short term, dumping helps transaction of goods on international trade increase in quantity. Normally, dumping enterprises intend to take over
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foreign markets, i.e. competing with domestic producers or importers from other countries for market share. As selling price is lower than equilibrium
price on the market, in accordance with the law of supply and demand, there will be a new equilibrium point, and an increase in quantity demanded that
will be met by exporters. Therefore, an increase in quantity demanded will lead to an increase in quantity supplied, that means international trade will
In the long term, when dumping enterprises control markets, and then raise selling prices, quantity demanded will decrease gradually, and so does
trading volume. Otherwise, domestic enterprises better their competitive ability; vie with foreign exporters for market share. If government of import
country imposes anti-dumping tariff, import goods will no longer be attractive for low price, so import quantity will reduce.
Dumping always bring benefit for consumers as lower price, wide selection of cheap and diversified import goods. On the contrary, domestic
producers suffer losses. Moreover, workers will lose their jobs because of reducing production, or bankruptcy. If the interests of consumers are bigger
than the ones of home producers and the unemployed, the society still benefits. On making decision of whether to levy anti-dumping tariff or not,
many nations consider this element.
Dumping and anti-dumping measures are controversial and complicated issues that result in strained international trade relations, hinder WTOs target
in establishing a transparent, equal international business environment.
1.2. Anti-dumping law