In article <
[email protected]>,
[email protected] says...
> "Steven L. Sheffield" <
[email protected]> wrote in message
> news:<BBC3B931.14170%
[email protected]>...
> > On 10/27/2003 11:35 AM, in article
> >
[email protected], "JP" <
[email protected]> wrote:
> >
> > > Just got around to reading this thread. Taken as a whole, looks like a classic dumping
> > > scenario to me. Shimano selling stuff at a significantly lower price than in its home market,
> > > driving competitors out of business, then raising the prices using their near monopoly to
> > > control access by distributors/retailers to product.
> >
> >
> > "Dumping" is selling at or near (below) manufacturer's cost to drive competitor's out of
> > business ...
>
> No, it's not. "Dumping" is selling goods in a foreign market for below what they are sold in the
> domestic market where they are produced. They may or may not be sold below cost. This kind of
> dumping violates national laws and the provisions of the WTO. It shouldn't be hard to see how this
> creates an unfair international trade advantage for the business with the protected, high priced
> home market who competes against businesses whose home markets are not protected.
>
> The popular notion of dumping you describe is not generally against the law, except where it is a
> part of other violations, such as monopolistic price manipulation, dumping as described above, or
> price fixing.
According to the definition I just dug up, there are elements of both of your descriptions:
"Selling goods at less than the normal price, usually as exports in international trade. It may be
done by a producer, a group of producers, or a nation. Dumping is usually done to drive competitors
off the market and secure a monopoly, or to hinder foreign competition. To counterbalance
international dumping, nations often resort to flexible tariffs. In international trade, acute
competition from foreign producers often leads to charges of dumping. A policy of dumping depends
for its effectiveness on the possibility of maintaining separate domestic and foreign markets, on
monopolistic influences maintaining a high price in the home market, on export bounties, or on low
import duties in the foreign market. Dumping disturbs those markets that receive dumped goods, and
it may drive local producers out of business. Governments may condone, or even sponsor, dumping in
other markets for either political reasons or to achieve a more favorable balance of payments. In
the late 19th cent., dumping became part of the trade policy of great European cartels, especially
German cartels. Britain, France, Japan, and the United States also have practiced dumping.
Antidumping legislation was first passed (1904) by Canada. In the United States various tariff acts
have been passed to deal with different types of dumping; in particular the 1921 Emergency Tariff
Act imposed special duties on goods imported for sale at less than their fair value or cost of
production. It was amended by the Customs Simplification Act of 1954. The General Agreement on
Tariffs and Trade (GATT) prohibits dumping and provides for increased import duties to combat the
practice."
The way I read it is that the main item in defining "dumping" is its purpose (i.e. to hinder or
drive out competitors). The most commonly used legal U.S. definition appears to be based on
production cost, not on what they are selling it for in foreign markets compared to the
domestic market.
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