Is Anti-dumping Misused?

Dumping refer to the act of exporting goods by a country to another at a price below its cost of production. Anti-dumping is the penalty imposed on low-priced imported goods to give local products fair chance to compete against the suspiciously low-priced imports (Kochher, 2009). Theoretically, dumping was set to give fair chance to the local product and local producers, however, an anti-dumping started between China and India and affected many other countries. Each country is imposing the anti-dumping penalties as a retaliation to the same act done by the other. Anti-dumping spread from 35 to 96 countries between 1980 and 2003 (Vandenbussche & Zanardi, 2008). World Trade Organization (WTO) should revise its anti-dumping rules to prevent some countries for misusing the anti-dumping rules. The Foreign Direct Investment (FDI) was affected by anti-dumping misused in China but Dang, Feng, & Lv (2010) stated that multinational corporations’ FDI will not be affected if China select to impose fair anti-dumping measures.

References:

Dang, J., Feng, Z., & Lv, H. (2010). The effects of antidumping measures on the FDI: A pre-marketing behavior aspect analysis in China. [Article]. International Journal of Organizational Innovation, 2(3), 206-224.

Kochher, P. (2009). India and china antidumping wars: Who is the winner? Globsyn Management Journal, 3(2), 61-64.

Vandenbussche, H., & Zanardi, M. (2008). What explains the proliferation of antidumping laws? Economic Policy, 23(53), 93-138. doi: 10.1111/j.1468-0327.2007.00196.x