- In a non-economics context, dumping may refer to illegal disposal of waste.
In economics, "dumping" can refer to any kind of predatory pricing. However, the word is now generally used only in the context of international trade law, where dumping is defined as the act of a manufacturer in one country exporting a product to another country at an unfairly low price.
What level constitutes "unfair" may be objectively defined as a price lower than the price in the manufacturer's own country, or lower than the actual cost of production. In practice though, many governments accuse foreign producers of committing dumping simply because the domestic industry finds it difficult to compete with the imports, irrespective of whether the producer's actions are actually improper.
In the United States, domestic firms can file an antidumping suit under the regulations determined by the Department of Commerce and the International Trade Commission. These trials are costly and the decisions are difficult to foresee, so there is a large potential for strategic actions and distorted market outcomes.
Proof is difficult to obtainEdit
As countries rule domestically on whether native industries are in danger, and whether foreign firms' prices are below the cost of production, and since the foreign cost of production cannot be easily known by domestic courts, the institutional process surrounding the investigation and determinations can be very unpredictable. Members to the World Trade Organization can file complaints against anti-dumping measures.
Very competitive pricing not necessarily "dumping"Edit
In many cases, because of much cheaper labour and other costs in Southern countries, they're simply able to export some products, such as, for example, farmed shrimp, at prices below production costs of shrimpers in Northern countries, USA included. They don't even have to subsidize transport, for nowadays, the share of transport costs in fish trade is much less than it used to be. Cheap exports, therefore, don't have to be "dumping" in the legal sense, especially where local producers can sell their products on local/national markets at prices which are not higher than those they quote on foreign, Northern markets. Northern producers, unable to compete with Southern exports, tend to complain of "dumping" and try, often successfuly, to have anti-dumping laws applied by their governments. (MB-Y)
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