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can i have an example of a company accused of dumping?what is the outcome of an...

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paboo2007 | Student, College Freshman | (Level 2) Honors

Posted November 28, 2011 at 4:21 PM via web

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can i have an example of a company accused of dumping?

what is the outcome of an accusation made against this company?

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lionello | eNotes Newbie

Posted November 28, 2011 at 6:05 PM (Answer #2)

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The outcome of an accusation is less important than the outcome of a legal action, as there is international law in the World Trade Organization on dumping (and government subsidies) because both subsidies (government money paid to a private company) and dumping (selling products internationally at below-market prices to put competitors out of business) go against the entire logic of free trade that inspired WTO law.

Free trade means that companies are free to compete against companies in other countries based on their strengths. The most efficient company, who delivers the goods and services for the lowest price, should win, and in theory this makes everybody better off because consumers pay the lowest price, and overall efficiency goes up. But if you have governments propping up inefficient companies, or if you have companies selling at a loss to put healthy companies out of business, this kills the free trade system.

The outcome of a successful action, quite frankly, depends upon where the company comes from, and whether the companies injured have the strength to enforce the judgments, which are by their nature transnational and very difficult to enforce where powerful countries are concerned, eg the USA, China. and between these two countries most of the litigation currently exists

A current example would be solar panels from China where there is a major trade dispute blowing up between the US and China. Chinese companies seem to be able to make very cheap solar panels and are successful in exporting them to the US. The US thinks that China is unfairly subsidizing the companies and has put an import ban on them, and from this comes all the litigation.

 

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