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EFFECTS OF DUMPING ON INTERNATIONAL ECONOMY
Effects of Dumping on International Economy
This Project is Dedicated To our Loving Parents And Respected Teacher Sir Amir Rashid
Effects of Dumping on International Economy
Sir Amir Rashid
By: Khalil-ur-Rahman Hassan Akram Hafiz Muhammad Ahmad Muhammad Saleem Atif Javid Hira Pervaiz Malik Usman Khalid (028) (024) (020) (052) (012) (086) (084)
Effects of Dumping on International Economy Acknowledgement ...........................................................................................................06 CHAPTER 01: The Problem and its Background Introduction ……………………………………………………………………. 08 Background Information ………………………………………………………..09 Theoretical Framework …………………………………………………………10 Independent Variable Dependent Variable Moderating Variable Intervening Variable Statement of Problem …………………………………………………………..15 Hypothesis Development ……………………………………………………….15 Definition of Hypothesis Kinds of Hypothesis Research Objective ……………………………………………………………..16 Significance of the Research ……………………………………………………16 Definition of Terms ……………………………………………………………..16 Dumping International Economy Protection Subsidies Cartels Natural Resources CHAPTER 02: Review of Related Literature Article # 01 Dumping: The Beginning of the End? …………………………………19 Article # 02 Is the „Global Free Trade‟ at Risk? …………………………………….21 Article # 03 Speakers‟ Corner Principles for Food Trade ……………………………24 Article # 04 The Dumping, not the Response, is the Issue …………………………...26 Article # 05 Dumped Foreign Steel is no Boon to American Consumers ……………27 Article # 06 The WTO‟s Broken Promise ……………………………………………28 Article # 07 Dumping as a Method of Competition in International Trade …………..30 Article # 08 Anti-Dumping: A Villain in International Trade ………………………..32 Article # 09 China‟s Development Benefits U.S. Economy ………………………….34
Effects of Dumping on International Economy CHAPTER 03: Research Design Research Design …………………………………………………………………37 Methods of Research …………………………………………………………….37 Respondents of the Study ………………………………………………………..38 CHAPTER 04: Presentation, Analysis and Interpretation of Data Data Presentation Specifications ………………………………………………...40 Round off the Data ………………………………………………………………40 Ceiling of the value Flooring of the value Computation ……………………………………………………………………..40 Tabulation and Interpretation of Data …………………………………………...41 Table 4.01 ……………………………………………………………….41 Table 4.02 ……………………………………………………………….41 Table 4.03 ……………………………………………………………….42 Table 4.04 ……………………………………………………………….43 Table 4.05 ……………………………………………………………….43 Table 4.06 ……………………………………………………………….44 Table 4.07 ……………………………………………………………….45 Table 4.08 ……………………………………………………………….45 Table 4.09 ……………………………………………………………….46 Table 4.10 ……………………………………………………………….47 Table 4.11 ……………………………………………………………….47 Table 4.12 ……………………………………………………………….48 Table 4.13 ……………………………………………………………….49 Table 4.14 ……………………………………………………………….49 Table 4.15 ……………………………………………………………….50 CHAPTER 05: Findings, Conclusions and Recommendation Summery of Findings ……………………………………………………………52 Conclusions ……………………………………………………………………...54 Recommendations ……………………………………………………………….54 Questionnaire…………………………………………………………………………...56 Bibliography ……………………………………………………………………………58
who work in an environment of close coordination and instant cooperation.Effects of Dumping on International Economy -: Acknowledgement :First and foremost. talented and Professional teachers. Coming to this esteemed institution was a great opportunity for us where we had a chance to work and learn under the supervision of trained instructors. for HIS immense bounties and never. worthy of all praise. fruitful over arched trees. We owe a deep debt of gratitude to the different economics department faculty members from different institutions of Lahore for helping and providing us the information required completing the project. we must praise the ONE. the source of all wisdom and creation. They have steady. ALLAH THE ALMIGHTY. Our special praise to the HOLY PROPHET HAZRAT MUHAMMAD (Peace Be Upon Him) who is forever a torch of guidance for mankind. generous nature. the invaluable guidance. We also wish to acknowledge from the inmost core of our heart of hearts. who are enablers of Eco-balance. cast and creed. without his guidance the project would have remained mere a dream. deep-rooted. regardless of color. May ever-ending success and ever-lasting happiness be the lot of them all (Aaameen) 6 . and significance support and meaning cooperation provided by Sir Amir Rashid advisor of the project. who generates what we need.ending mercy. This institute gave us a vital chance to learn to place our self in the ever-growing world of Business Administration and to be a part of it we are also very thankful to our institution COMSATS for providing such an intelligent.
Effects of Dumping on International Economy CHAPTER 01 THE PROBLEM AND ITs BACKGROUND 7 .
It is said that the protection not only saves the domestic industry but also protect the countries condition. So the trend of dumping gives rise to the concept of protection. The dumpers sell their specialized products in that country at lower prices than the domestically produced goods to capture more market. When the concept of dumping is exercised it is said that it will affect the economy of the countries around the world either positively or negatively. People think that the phenomenon of dumping is to be hindered to save the domestic industry. It is said that the dumper‟s country gets all the benefits that are losses for the country where it is dumping. The cheaper goods are one of the most preferred choices for the customer around the world. This specialization will give trend to dumping which is a threat to the domestic industry around the world. They want to have more choice when they intend to buy. The concept of Free trade has supported the international economy by increasing the interconnectivity of the world economies. This phenomenon emphasizes the specialization of different countries in the fields in which they have more resources for production than the other countries. They are also effected positively or negatively to effect the over all economy condition. There are some important components of economy that will obviously be affected by practicing dumping. It is said that these low cost goods are a gift for customer but they destroy the industry and economy. This phenomenon of free trade gives rise to certain questions and also has certain limitations and advantages for the countries around the world.Effects of Dumping on International Economy Introduction: The world economy has the trend to move towards the free trade from last two decades and the trend has boosted recently. Today‟s economy has become a knowledge economy and the people around the world are more knowledgeable about the international affairs. So these two entities of dumping and protection are the main concern in this regard. The other economic factors like employment rate and currency value are also affected. So they would like the foreign cheaper products to be imported in their domestic market. Government wants to reduce the imports to improve the domestic industry and the balance of payment 8 . which they will obviously do because of their low costs. One of the components is gross domestic product (GDP) and the other is the gross national product (GNP) of that country.
Back ground information: Dumping and anti-dumping cases can be dated back to very early days in international trade. Dumping and anti-dumping cases can be dated back to very early days in international trade. From January 1. This situation continued until 1950s when more antidumping cases began to take shape. 2003. the period witnessed 2284 anti-dumping investigations launched by the WTO members. 2003. in 2001. very few cases of repelling imports through anti-dumping actions took place. However. India. Argentina. This situation continued until 1950s when more anti-dumping cases began to take shape. From January 1995 to June 2003. Products involved in the cases were mostly 9 . On the other hand. Statistics by then Ministry of International Trade and Industry (now Ministry of Economy. However. the developed world generally also intensified their anti-dumping campaign. developing countries and regions launched more than half of the anti-dumping investigations. developing countries and regions began to take up anti-dumping actions to counterattack the brunt to their own local industries brought about by unfair trade. 1995 to June 30. the period witnessed 2284 anti-dumping investigations launched by the WTO members. the US launched up to 74 anti-dumping investigations as against its 14 cases in 1995. Take the US for instance. about 40 in 1970s. A country might launch two or three such cases at the most in a year. From January 1. very few cases of repelling imports through anti-dumping actions took place. 1995 to June 30. for a long time. Frequently being put under anti-dumping scrutiny. India led the world with its 344 attempts. The government implements tariffs and quotas and certain antidumping laws to enhance the price of foreign imported goods than the domestically produced goods and to reduce the demand of imports to protect their industry. for a long time. and a surge to 174 in 1980s. Trade and Industry) of Japan recorded an annual average of 30 international anti-dumping lawsuits in 1950s and 1960s.Effects of Dumping on International Economy to support the economy. Brazil and South Africa are typical examples in this aspect. exceeding the US 308 cases.
and textiles. The WTO defines that a dumping case is a trade behavior in which a country market its products in another at a price lower than their normal value.Effects of Dumping on International Economy labor-intensive ones. such as metal and metal products. So the imports of that country will increase. Now dumping is going to affect the international economy which is our dependent variable. Consequently the people start buying that product. mechanical and electrical products. The phenomenon of dumping allows different countries around the world to get more market share in international market that comprises of countries around the world. thus bringing damage to related industry in the import country. chemical product. When the dumping is practiced it affects the international economy. Dumpers provide the product at the prices lower than the price prevailing in the domestic market in a specific country. Theoretical framework: Independent variable: Dumping Dependent variable: International economy Moderating variable: Protection Free trade Intervening variable: Natural resources Government subsidies Cartel The theoretical frame work helps us determining the relationship among the variables. So we are able to determine the relationship among the variables. It also specifies direction of the relationship. This will obviously affect the economy and to determine this impact we need to break down economy into certain components due to its 10 . Here the independent variable is dumping that is our primary concern.
The country that has the more natural resources available to produce a product cheaper than what the other countries does it will be more convenient for it to produce cheaply and dump the product in the international market and earn more market share. So this effect can be measured by measuring the impacts on components of economy like GDP. The moderating variables here are protection and free trade. The local industry will obviously be affected. This will increase the prices of dumped goods and people will not buy them. quotas. By implementing the protection means we will impose certain tariffs. The subsidies given to a specific industry by the government also gives rise to cheaper production. So economy being a dependent variable will be affected by dumping. 11 . GNP. The protection affects the intensity of the relationship among dumping and international economy. If the international free trade does not take place there would be no free transfer of goods and the dumping will than be eliminated. This is also called comparative advantage of that country on other countries. This is how more dumping takes place. This will provide protection to local industry as well as economy and any type of dumping will not be able to affect the economy. The intervening variables here are natural resources. government subsidies and cartels. All these factors will affect the economy of that country.Effects of Dumping on International Economy subjective nature. taxes and duties on dumped goods. The industrialists in a specific industry come together and sell at same price at home market to abolish competition. currency value and the unemployment. This will enhance the chances of dumping effects on economy more. This allows them to sell expensive in home market to earn required revenue and then they are able to sell cheaper in foreign markets to earn more market share. The industrial cartels in a country also give rise to dumping practices.
01 :- 12 .Effects of Dumping on International Economy -: Figure 1.
Effects of Dumping on International Economy -: Figure 1.02 :- 13 .
Effects of Dumping on International Economy -: Figure 1.03 :- 14 .
it is expected that solutions can be found to correct the problem encountered. Definition of Hypothesis: A hypothesis can be defined as a logically conjectured relationship between two or more variables expressed in the form of a testable statements. Relationships are conjectured on the basis of the network of association established in the theoretical framework formulated for the research study. Formulating such testable statements is called Hypothesis development.What are the possible impacts of dumping on international trade? 15 .” The alternative Hypothesis: (Ha) The alternative hypothesis is that. “The dumping affects the economy. Hypothesis Development: As we have define the important variables in a situation and also established relationship among them through logical reasoning in the theoretical framework. By testing the hypothesis and confirming the conjecture relationship. This research specifically provides an answer to the following questions that are as follows: 1) .Effects of Dumping on International Economy Statement of the problem: The research attempts to determine that is international economy affected by practicing dumping and to find out its useful or adverse affects on international economy.” Kind of Hypothesis Our hypothesis is non-directional kind because the relationship of variables does not show any direction or proportion. Hypothesis: Null Hypothesis :( Ho) A null hypothesis is that. For this purpose we formulate some statements from the variables and their relationship to perform tests. “The dumping does not affect the economy.Do the dumping affect global economy? 2) . Now we are in position to test whether the relationships that have been theorized do in fact hold true or not.
16 . finance. the expansion of production by transnational corporations to many countries around the world.The impact of dumping on different components of economy like GDP.Why protectionists are threatened by dumping? Research objectives: The research objective will be as under: Effects of dumping on global economy Impacts on international trade Significance of the research: The study covers the effects of application of dumping on international economy. GNP. markets. Countries around the world are involved in trade to stabilize their economies. communications. consequently they try to protect or benefit their economies from good or bad impacts of these trends. They are much concerned about the trends being followed in international trade. The global economy includes the globalization of production. and the labor force. The producer of a specific product dumps his product in the foreign market to get more market share in the foreign market. International economy: It refers to the expansion of economies beyond national borders characterized by free trade in goods and services. in particular.Effects of Dumping on International Economy 3) .How are countries around the world affected by dumping? 6) .What are the suitable protections that are implemented by countries around the world? 4) . Definitions of the terms: Dumping: Dumping has been defined as selling abroad below cost or at a lower price than that prevailing in the home market of the exporter. currency value and employment? 5) . They take the precautionary measures accordingly. Countries around the world may be able to get help from this study about the effects of dumping on their economies and mould their trade policies to stabilize their economies.
and marketing of goods by the members. Cartels: A combination of independent business organizations formed to regulate production. pricing. coal. Protectionism supports the policy of charging foreign traders a tax. Examples include oil. Opponents of this kind of assistance argue that it is an inefficient use of resources as it makes the production of certain goods economically viable. Natural resources: Resources occurring in nature that can be used to create wealth. 17 . This leads to unfair competition and lower returns for those producers producing the good without assistance. water. when they otherwise would not be. or tariff on imported goods. and land.Effects of Dumping on International Economy Protection: The term protection is defined as Restriction of international trade by a government in order to shelter domestic producers from foreign competitive pressures. and rewards those whose production processes may be inefficient. Subsidies: Government grants to local producers to assist in the production of particular crops or goods.
Effects of Dumping on International Economy CHAPTER 02 REVIEW OF RELATED LITERATURE 18 .
Since the ministerial conference in Cancun.2 billion in US cotton subsidies and $1. Moreover. This means that the USA will have to reform its current practices. The panel found that the USA used hidden export subsidies to circumvent its WTO commitment to reduce export subsidies. has impoverished all of these farmers. Following a complaint by Brazil at the WTO. In West Africa alone. This landmark case sends hope to millions of impoverished cotton farmers in West Africa. US cotton dumping. In the case of US cotton subsidies. And it might be the beginning of the end for US and EU dumping. the European Union and the United States have used loopholes and creative accounting to continue dumping products on world markets.6 billion in exports credits (for cotton and other commodities) are against WTO rules.Effects of Dumping on International Economy -: Article # 01 :Dumping: the Beginning of the End? Oxfam Briefing Paper. Cotton symbolizes the unfairness of current subsidy practices of the United States. cotton has been a major item on the WTO negotiation agenda. the dispute settlement body of the WTO concluded that such practices hurt developing countries and are in violation of WTO rules. the USA misreported certain programs as „non trade distorting‟ when in fact they were 19 . This represents almost all cotton subsidies and close to 50 per cent of all export credits used by the USA in 2002. June 2004 Despite their WTO commitments to reduce trade-distorting subsidies. 10 million people depend on cotton for their livelihoods. The WTO panel found that $3. a dispute settlement panel has found that US cotton subsidies are contrary to WTO rules. as doe‟s sugar for the European Union. causing a sharp decline in world cotton prices. These subsidies are therefore contrary to WTO rules and must be removed: While the USA domestic support subsidizes for cotton in the marketing year 2002/03 had a „significant price suppressing effect‟ which has caused serious unfairness to Brazil‟s exports. This decision is a giant step forward in the fight against dumping.
Effects of Dumping on International Economy Wider implications: The panel ruling will have profound political implications that go beyond the specific case of the USA and cotton. While this case only pertains to cotton subsidies. The key demand of West African countries for a drastic reduction in US cotton subsidies has also been fully justified. However. with the expiry of the peace clause. it is now legally established that developed countries failed to abide by subsidy rules that they had crafted during the Uruguay Round. 20 . all subsidies can now be challenged by developing countries in the Dispute Settlement Understanding (DSU) on the grounds of serious prejudice. • A lost chance to reduce EU subsidies. • Following the Canadian dairy and the US cotton panels. It can either choose to implement the meeting in good faith or face possible trade sanctions by Brazil. • An overall reduction of the ambition of the agreement on agriculture as developing and Cairns countries would conclude that the USA is not interested in reform. If they are serious about development. the EU and the USA must agree to improved rules that will effectively end export dumping and reduce trade distortions. the USA will be at a crossroads. Non-implementation would give a signal to the EU that they can do the same with sugar or that they can continue to postpone the elimination of export subsidies. the same principles could apply if developing countries were to bring similar challenges about other highly subsidized crops such as soybeans or rice. Why the USA should implement the ruling The USA will undoubtedly appeal this ruling. which is likely. If it loses in appeal. developing countries have won an important moral and legal victory. The example of cotton proves that most subsidies currently used by the USA and the EU are damaging to developing countries. gaining a stronger position in multilateral negotiations. the USA would have a lot to lose by failing to implement this ruling in a meaningful way. Hence. • Under current rules.
Globalization is a phenomenon that has remade the economy of virtually every nation. It is seemed that concept and functionality of free trade is now at risk. • A weakening of the WTO rules-based system.Effects of Dumping on International Economy • A lost opportunity to respond to legitimate demands made by West African countries to eliminate trade-distorting cotton subsidies. ------------------------: Article # 02 :Is the ‘global free trade’ at risk? By Mehmood-ul-Hassan Khan Cross-border trade flows are the glue of globalization. US provoked to follow the policies of pure and severe nationalism rather than principles of international economics. and anti-dumping duties imposed by different countries on the products of our country showed the other side of picture of free trade. Although free trade increases wealth in the long run and on the whole through the operation of comparative advantage but it is seemed that US. Protective measures 21 . The EU imposes Seafood ban on imports from Pakistan and French farmers ask for the subsidiary from the government. reshaped almost every industry and touched billions of lives. often in surprising and ambiguous ways. Global economy and especially national economies have taken over by tight and to some extent rigid concept of nationalism. of which the USA is a major beneficiary. In the recent past especially. EU. Oxfam also urges the EU and the USA to negotiate in good faith new rules in the current WTO agricultural negotiations that would put an effective end to dumping. This would be a continuing source of problems for the USA at the WTO. The imposition of GSP by the EU on Pakistan‟s textile exports. Despite the dawn of world trade organization [WTO] from January 1. China and now Japan is the new addition to that tally of "Protectionism" or anti-free trade concept. 2005 major economic super powers of the world are taking anti-free trade policies.
The China national offshore oil corporation [CNOOC] withdrew its bid for US Oil Company. citing unprecedented political opposition and now Tokyo. Bush administration and politicization of a economics Unocal finally refused to accept a Chinese firm‟s take-over bid on flimsy grounds.3 billion. moved to impose punitive tariff on some goods produced in the US are the latest few prime examples of economics with the smell of blind nationalism. agreed to propose a bill that would require the departments of defence. which promised to delay a successful CNOOC take-over. which made congressional opposition to CNOOC‟s bid politically measure and the administration‟s compliance in it politically prudent. acting within the guidelines of a WTO decision against Washington on steel tariffs. The congressional pressure.Effects of Dumping on International Economy against the textile products of China by EU and US started the great blame game of economic with the blend of nationalism. It was no doubt a blasphemous act. was the result of a full-scale lobbying campaign by Unocal‟s other suitor Chevron that gained the support of security hawks as well as legislators in Chevron‟s constituencies. the US and EU and China have already abolished export tariffs on 81 categories of textile products.5 billion was higher than rival Chevron‟s which was $17. Switzerland and Japan are the main investors in American corporations but nobody in Washington would like to call them a threat to US security. 22 . The CNOOC‟s bid to take over Unocal collapsed. To appease concerns by that. The establishment of US‟s. after both houses of the republican controlled congress. It was fuelled by the mobilization of popular sentiment against China over US job losses. On the direct pressure. and against the true and simple spirits of free trade. energy and homeland security to investigate the bid before it was vetted through normal administrative procedures. Unocal. and spread to lawmakers playing to sentiments The undue and powerful congressional opposition along with power politics of Bush administration in the whole process of Unocal bid shocked the confidence of international trade mechanism. has forced the Chinese National Oil Company to withdraw its bid for the purchase of Unocal. the "Mecca of Corporate Gospel". (threat to national security) although its offer of $18.
Effects of Dumping on International Economy The US has a long history of protectionism and there was a time in the distant past when its import tariff was as high as 49 per cent. then it is China. In the case of the Byrd Amendment. Japan became the latest major US trading partner to impose sanctions to protest a US anti-dumping law. but congress has dragged its feet. with US steel producers predictably in favor of keeping the Byrd Amendment in force and steel consuming industries in favor of its repeal. With the retaliatory measures. On August 3. McDonald‟s and Starbucks are already in the Beijing‟s centuries-old palace complex. Wal-Mart now operates 47 stores in China and intends to spread throughout the country. US investment in China is 13 times greater than Chinese investment in the US. which diverts the proceeds of US tariffs placed on foreign steel that has been determined to have been dumped on the US market directly to domestic US steel producers. Since the WTO decision.1 million a year. As in the CNOOC affair. A recent case in point is re-imposition of tariffs and quotas on Chinese textiles by Washington when the age-old quota regime had just ended with a view of protecting its textile industry. in retaliation for the failure of congress to repeal the Byrd Amendment. Including ball bearings and aircraft components. which should be feeling worried. 2005. Tokyo announced its imposition of punitive tariffs on a range of US goods. but also rewarded their US competitors. the ceiling approved by the WTO. nor described it a threat to its people‟s livelihood. The tariffs will cost US exporters more than $50 million and be set at 15 per cent from September 1. Beijing has raised no alarm. At present. If overseas mergers and acquisitions were really to pose any threat to a country‟s security. since steel 23 .000. taking the unprecedented step of levying punitive tariffs on 15 US goods including steel. the Bush administration has sought to have the Byrd Amendment revoked. not only penalized Japanese producers. McDonald‟s already has 600 outlets and KFC 1. destroying local businesses in towns and villages. Japan‟s imports from the US could fall by up to $52. Tokyo had argued successfully before the WTO that the Byrd Amendment violated international trade agreements because it. powerful US business interests are on both sides of the steel tariff issue. 2005 in line with similar moves by Canada and the EU against the so-called Byrd Amendment. the purely economic balance of power would seem to favor the forces for repeal.
at all times. some of these countries "dump" the products into poor countries. Signs of growing economic nationalism in the US are on the rise. directly or indirectly. thus reducing their food security. but to assure that they are on the agenda. the US is bound to lose comparative advantage in many industries. This essay raises some key issues. ------------------------: Article # 03 :Speakers’ Corner Principles for food trade George Kent The governance of international trade in food should give special attention to the concerns of those most vulnerable to food insecurity. Reducing tariffs on primary commodities makes it easier for rich countries to dump their primary commodities into poor countries. dumping can reduce the incomes of large parts of the population. not to resolve them. To relieve the glut. resulting in overproduction in those sectors. Subsidies and dumping: Many countries subsidize selected food producers.Effects of Dumping on International Economy consumers are more financially powerful and greater in number and political influence than steel producers. There is popular resistance to liberalization of global markets finds reverberation in congress. Since much of the employment in poorer countries is in small-scale food production. "Food security exists when all people. Large shares of the subsidies that are provided go to larger producers who are well off and have reasonable alternatives. 24 . Dumping can do severe harm to food producers in the receiving countries. safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life. As rising economic powers throughout the world become more competitive. have physical and economic access to sufficient. setting off moves for protection that will be opposed by industries that gain or maintain advantage. As specified by the World Food Summit in 1996.
small-scale producers who have few alternative means of livelihood are a different matter. in those subsidies to small-scale food producers are part of the social safety net. the prices for the same product of the same quality would be the same throughout the world. but it is not equally beneficial. This "welfare for the rich" should be sharply reduced or eliminated. The liberalization of food trade through the reduction of tariffs should be accomplished in a way that does not discriminate against poor countries.”2 Their labor is paid less as well. discriminatory pricing: Many other issues are being neglected. The United Nations Development Program observes. While subsidies to small-scale producers are not economically efficient. The result that their incomes plummet. subsidies to small-scale food producers who produce for local consumption (not export) can be very cost effective. Local food producers in poor countries may not be able to compete with the imports. Discriminatory tariffs. Even without discriminatory tariffs. the pressure on poor countries to open their domestic markets to foreign food suppliers can be very harmful to them.Effects of Dumping on International Economy They receive subsidies primarily as a result of their political power rather than their need. Trade tends to provide its greatest benefits to those who are more powerful. In the idealized marketplace. with variations only due to transportation costs. “. the subsidies to poor. they may be socially efficient. Richer countries promote trade liberalization in a way that suggests it would be beneficial to all. rich producers are paid more than poor ones for identical goods. Reducing tariffs on primary foods but not on processed food is discriminatory. For this purpose. There is currently a pattern of "escalating tariffs" under which tariffs are pushed down on primary commodities but left high on processed foods. However. destroying their food security. subsidizing them may be good public policy. . especially issues affecting poor countries. These producers may be inefficient by common economic criteria. . preventing poor countries from engaging in more profitable value-added (processed) food industries. However. The effect of cheap imports can be devastating. It contributes to the widening of gaps between rich and poor 25 .
The poor are politically weak. not antidumping duties. The foreign exchange that compensates for the outflow of food could be used to meet the food needs of the poor. The actual problem is not to discuss the nature of protection or antidumping law but to eliminate such practices that support it. Global Economic Policy Program The author is of the view that America should highlight the issues underlying dumping such as cartels and subsidies that promote dumping practice at different WTO plate forms to eliminate dumping. ------------------------: Article # 04:The Dumping. health. The Japanese steel industry use dumping as a way of building market share in the world steel market. The typical example is Japan dumping in US steel industry which is being restricted by new duties imposed by US law. The priority of human rights food is so essential to human nutrition. Mexican companies use 26 . not the Response. food trade should be managed on the basis of the obligation of all states and other actors to respect human rights. The domestic Japanese steel market is heavily cartelized that allows Japanese companies to charge high prices and build profits in the protected home market and use them to effectively subsidize sales to the United States. The poor feed the rich. food flows from food deficit countries to countries that have more than enough. is the Issue By Greg Mastel Director. The focus should be the problem of dumping. Third-party pricing data indicates that Japanese domestic prices for many steel products are as much as several hundred dollars per ton more than the export price for the same steel. particularly the human right to adequate food. and do not control how foreign exchange earnings are used.Effects of Dumping on International Economy On balance. but often it is not. and general well being. The steel Japan exports to the United States are dumped.
The critics are of the view that it gives the opportunity the consumer to enjoy cheaper steel that shows their shortsightedness. The world steel market is deeply distorted by subsidies. cartels and national industrial policies that support dumping.S. Actually this low price will destroy the US steel industry effects on economy. These countries are selling steel in US at below the cost of or below the cost at home market.S. So the author here gives us three reasons for why should we counter this dumping effort. workers out of their jobs.Effects of Dumping on International Economy the domestic profits to finance dumping in US and this dumping causes serious injury to U. The author wants to convey that we should think of reducing some of the core causes of dumping like subsidies and cartels more importantly as well as discussing antidumping at WTO plate forms. The second very important reason is that US government should help and support its steel industry by subsidizing as most of the countries are doing around the world. He explains that first of all the dumping is an illegal practice and United States has had laws against dumping for most of this century endorsed by the World Trade Organization. If these core issues are addressed there will be a lesser need to establish and implement antidumping laws ------------------------: Article # 05 :Dumped Foreign Steel is no Boon to American Consumers By Greg Mastel Director. Russia and Brazil. In a recent study it is found that consumer benefits of dumping and this will have diverse 27 . firms and puts U. Global Economic Policy Program The author is of the view that some critics have condemned the US government decision to protect the US steel industry and economy from the dumped steel by foreign countries like Japan.
S. steelworkers are so productive that they are able to command wages almost twice as high as those of the average U. least of all. has increased rural poverty and inequality. the well-being of the world's poorest people. poor countries attack them as hypocrites who want to pry open markets and "dump" their products at destructively low prices and at the same time keep their own markets closed to Third World products. and has wiped out small farms and communities. but both also want to keep their farm subsidy programs in place. The agriculture was planned to be focused on since the vast majority of people in poor countries still work the land as small landowning peasants or as rural laborers but it seemed more likely that any new agreement would further enhance multinational corporations' control over global agriculture and not the economies of developing countries or. Both the European Union and the United States promote the ideology of free trade. Further.Effects of Dumping on International Economy were rapidly outweighed by the negative impact of the economic losses in the steel industry. job. economy. trade ministers agreed to increase agricultural producers' access to markets (especially for poor countries selling to richer countries) and to decrease domestic financial support for agriculture. Finally. ------------------------: Article # 06 :The WTO's Broken Promise By David Moberg It was supposed that “development" of the world's poorer nations would be at the top of the agenda of World Trade Organization members. It is found that freer trade "has cost the poor jobs and income.S. Because the United States wanted to protect its domestic agriculture programs that‟s why the topic was not given much importance. For that." Even when increased agricultural trade brings 28 . So the dumped foreign goods can be a gift to consumer but it‟s destruction for the economy in disguise. the steel industry is an internationally competitive and valuable component of the U. Qatar. At the last WTO meeting in Doha.
Both cases of dumping have the same deleterious effects. and to prevent crops from being exported at a below market price. But by 29 . In the eyes of some free trade theorists. it is the very big farmers and multinational. but it isn't the same thing. the consuming countries should be delighted at getting cheap food at less than "L the cost to produce it. or end users. like Archer Daniels Midland. benefit from these low-cost agricultural products. And those payments were concentrated among the largest and richest farmers. like food giants from Coca-Cola to Tyson's. and processors.S. leaving smaller-scale farmers-those that don't go bankrupt-to rely on income from jobs off the farm to make up for their losses. selling goods below the cost of production. Some countries can benefit. But such dumping simply leads to low prices and fewer markets for the products of farmers and peasants elsewhere in the world-like Mexican peasants flooded with cheap U. destroying its indigenous dairy industry. Cargill-and the handful of other companies that dominate the global grain tradeprofit from selling this cheap grain. Agricultural policies in the United States and Europe cause trouble for those developing countries that do open their markets by encouraging dumping that is. Dumping may be related to the existence of domestic subsidy programs. to limit crop production. but the chicken isn't. Doing this would reduce the volume of U. Government support payments compensate for only a small part of that shortfall for most farmers. It would be possible to guarantee that U. and the dark meat that is less prized in European and American chicken markets is dumped in Senegal or other countries. farmers are paid at least the full cost of production. exports and allow farmers in the United States and in most other countries to come out ahead financially. The milk is subsidized.S. especially if they do not have a big farming economy (like Saudi Arabia). European milk is dumped in Central America.S.Effects of Dumping on International Economy more revenue to some countries. corn. wiping out flourishing domestic poultry industries.
he can hold the surplus stock to sell it in other season 2. 2 (February 1923) There are different type of dumping which have different point of view and classified differently . as people in the rural sector would have more income to buy goods. by minimizing the prices he can increase the sale 3. educate children. and improve their livelihoods. reverse and export dumping .concealed.so there are three situations which he can face 1. ------------------------: Article # 07 :Dumping as a method of competition in international trade Jacob viner The university journal of business vol. In this situation if the producer may find that its seasonal stock is not running successfully at the labeled price . Now if he keeps stock for next season then he has to bear cost of storage and security so in order to avoid that cost he will look another option By minimizing the prices of his product may be not earn profit which he has been estimated . Sell the product in unimportant market at best prices.for the purpose of economy it is classified into motive and degree of continuity of the dumping . developing country economies would be strengthened.Effects of Dumping on International Economy destroying the still-large agricultural sectors in most other countries.so he do not want to deprive of the estimated profit. If all dumping were halted.1no. low price imports depress domestic agricultural markets around the world-markets that are needed for development.there are open . 30 . And the transition of the workforce out of agriculture could be managed more humanely.
These types of goods can be shipped with the expectation that the y will sell at good price in foreign as compared to home market. So in order to keep monopoly for long time producer may adopt this strategy . now if there is situation that the producer producing the product in the environment in which the prices are low so he has to sell his product at that price but he know that the prices of that product is high in other market t but he sells only to retain the market for future .this most dangerous type of dumping in the world as china is doing to day . In order to keep monopoly of product some producers keep their prices low .because their domestic products are totally disturbed .dumping may be used as defense against cutthroat competition.this is big threat for American commerce department .their domestic industries are at verge of end because their cost of production is high as compared to the prices of product which china and other countries dump. If a manufacturer may decide to maintain his domestic prices at high level and to de foreign order he keep the prices of foreign prices low for balance of his potential output in preference to operating only a part of capacity . ------------------------ 31 . the country which produce the products dump the products . in absence of resort to dumping.if they raise the prices can be threat full for them because there is chance of competitor in the market.Effects of Dumping on International Economy Now only one option he has which can not affect to much ion the profit and no worry of storage and that is to sell his product in unimportant market This type of dumping may be occurring when we anticipate selling product at good price in foreign market. A concern may sell at dumping prices in a given market in order to eliminate the competition in the market. In this way he can extend his plant so as to obtain the economies of large scale production.if there is new producer of particular product in the market the new will sell at low prices because in order to compete other in the prices and retain the market.a increase in the domestic prices may be unprofitable especially if the domestic demand for his product is inelastic.
accepting international price discrimination is one step to be taken. Despite its evil name. First. the government can impose antidumping duties. namely dumping. and it has proved itself a bad policy. but it has become clearer over time that there is nothing wrong with dumping. there must be evidence that the domestic industry is materially injured by dumping. Looking back through time. In a way. dumping does a good job. What has actually gone wrong is antidumping. the first antidumping law was meant to remedy unfair trade. Why? Where dumping takes place. When both are satisfied. The margin is the price difference between the normal value and that charged by alleged dumpers in the domestic market. a domestic industry may file a petition against foreign dumping firms. two conditions have to be fulfilled. Today it is nothing but a pure protection in disguise. If the world is looking for free trade. It benefits people in poor countries by offering lower prices and new varieties of merchandises. How unfair is dumping? Dumping is actually fair. antidumping duties work like import tariffs. on imports from the dumping firms. The details of antidumping process vary across countries. usually equal to the sizes of dumping margins. The thing is this question was put wrong at the beginning and the beginning was long time ago. This implies that the domestic industry can strategically use this instrument to target only foreign firms it 32 . dumping margin must exist. but in general before antidumping duties can be imposed on allegedly dumped imports.Effects of Dumping on International Economy -: Article # 08 :Antidumping: A Villain in International Trade From Sarut Wittayarungruangsri Now one question can be answered. Second.
examine whether productions in downstream industries are significantly undermined by the duties imposed in their upstream counterparts. Consumers are clearly worse off because they have to bear the cost of duty. the two industries most involved with antidumping activities are steel and chemical. But now there are more people negatively affected by the duties. Alas. Imports become more expensive. being selective. argues that antidumping is only second the Multifibre Arrangement as the most costly of all US import restrictions. Controlling for other factors. 33 . The burden of antidumping measure seems to benefit no one but the domestic producers whose foreign rivals face an antidumping action. Worse than that. Furthermore. the downstream productions are deteriorated by the duties imposed on upstream products. from Duke University and Wellesley College respectively. This is due to higher prices of their intermediate inputs. we need to know whether the increase in profits of the domestic firms is large enough to offset the decrease in welfare of all others in the country. To evaluate if antidumping is an appropriate policy or not. This issue may not be serious if most dumped imports are not intermediate but final ones. This is not yet the end of the story. Depending on price elasticity. It is certain that consumers who purchase steel as a final good are worse off. antidumping measures also generate more negative effects than tariffs do. Both common sense and formal estimation say no. an economics professor at Dartmouth. there is no guarantee that the domestic producers will keep their prices at the initial levels. And. One can easily imagine how large the effect of antidumping measure would be. they can obtain higher profits by setting a new price higher than before but lower than those of dumped products. looking at the WTO database. One may think about steel for example. Douglas Irwin. And the answer is yes. There are also consumers of the downstream industries out there. Things become worse when dumped imports are intermediate goods.Effects of Dumping on International Economy views as competitive rivals. Corinne Krupp and Susan Skeath.
economy. A number of papers consider the two heavy users of antidumping measures. This is due to trade diversion effect.S.S.S. there are some reasons by these reasons U. exporters from other countries may find an opportunity to compete in the market more aggressively. the increase in imports from non-dumping countries tends to be larger than the fall in those from the dumping ones. however. are two engines of the world economic growth.Effects of Dumping on International Economy antidumping measures can paradoxically hurt the domestic producers themselves.S. If Chinese economy will develop than the American goods and services demand will also increase in China. and find strong trade diversion effect. this type of effect is weaker. In the US. But in case of anti-dumping laws the competition will vanished out and the growth will not effect the efficiency and productivity. the US and the EU. economy. As antidumping is selective.S. it is still strong enough to cast doubt whether the EU producers really benefit from antidumping practices. In the EU. China and U. By this the living standard of people will enhance with controlling inflation rate. can buy easily. -----------------------Article # 09 :'China's development benefits US economy' Xinhua Published Date: 28-08-2005 In this article the person is interviewed named Xinhua. while the dumping firms sell less in the domestic country. The evidence supports this argument quite well. By the Grimson. China‟s development will have numerous beneficial effects on U. he said that china‟s economy development will be benefited for the U. economy will get benefit that are as follows: Chinese products are low priced so the people of U. 34 . who has been working in anti-dumping field.
S. manufacturing bodies to blame Chinese manufacturing bodies in U. 35 . businesses will improve their productivity and efficiency in the competition environment. Every country has opportunity to learn from the mistakes of other countries. so China did the same and gain lesions in the area of urban planning and environment.S. the U. manufacturing jobs.S.Effects of Dumping on International Economy If China as a manufacturing superpower will push up.S. It is essential for two countries (here U.S. and china) to handle trade dispute in an objective. The trade deficit with rest of the world is three times more as with china over the pas ten years. By him the Chinese economy growth is unprecedented. manufacturing sector share of the U. He also explains that less than half of the U. He also said that it is not right for U. abiding by fundamental principles of fairness in addition to only the direct letter of international and domestic law. manufacturing jobs is before the emerging of china as a trade power.S. And unilateral action is not the ideal way to solve the problem. According to the statistics U. By Grimson the decline in the U. China is progressing very rapidly in past several years.S. trade in 2004 is related to trade with East Asian countries including China. transparent fashion.S. economy has fallen from 32 percent in 1960to 22 percent in 1980 and 14 percent in 2002.
Effects of Dumping on International Economy CHAPTER 03 RESEARCH DESIGN 36 .
It will represent the various aspects of our research design. These questionnaires were developed on the basis of our understanding which we developed by reviewing the literature from different books and internet. The questionnaire contained questions related to the effects of dumping on economy”.Effects of Dumping on International Economy Research Design: This chapter contains discussion on the methods and procedures that are being used in this study. It will help us to understand the various tools being used in conducting the research. We were able to collect sufficient information with the help of these questionnaires. The method of research mainly used in this study is descriptive method which is described as follow”the descriptive research is a study that obtains facts about existing 37 . The articles reviewed and related studies developed by different authors were of a great help while conducting this research. Purpose of the study: descriptive study Study Setting Non-Contrived Unit of Analysis Individual Sampling Design Sample size (n) Time Horizon One shot (cross sectional) Collection Data Method Questionnaire Scale use Likert scale Method of Research: The information is collected through questionnaire.
Respondents of the Study: For collected information we visited five different institutions from the institutions situated in Lahore. Our respondents were people from the economics department of these institutions. It also makes it easy to understand the questionnaire on the part of respondents. People selected the options according to their choices. We have used 5points likert scale and the numbers assigned to them were as follows: 1 = Strongly Disagree 2 = Disagree 3 = Indifferent 4 = Agree 5 = Strongly Agree Our purpose of using this is to determine how strongly the respondents agree or disagree to our statements. We had to brief them about our frame work and float the relevant information so they might feel more at ease in filling the questionnaires. We have to choose an appropriate scale for the questionnaires so it may be convenient for us to get respondents opinion and then to determine the outcomes. The numbers assigned does not show weights. We randomly selected ten (10) economics experts in these institutions and they filled the questionnaires. The difference between any two points on the scale remains the same.Effects of Dumping on International Economy conditions or details and significant relationship between current phenomena. effects are being felled. or trends that are developing “. It describes and interprets prevailing conditions of the relationship that exist or do not. 38 . beliefs or point of views that are going otherwise.
AND ANALYSIS OF DATA 39 . INTERPRETATION.Effects of Dumping on International Economy CHAPTER 04 PRESENTATION.
1.5” then the mean value will be ceiled into the next absolute number. These numbers does not represent the weights.Flooring of the value: If fraction value of less “. 2. Computation: We have calculated the “Arithmetic Mean (µ)“ with the help of formula given below: µ = ∑ fx / ∑f Where: µ = Arithmetic Mean ∑ = Sum of Values f = Frequency x = Options 40 .5” then the mean value will be floored into the previous absolute number.Effects of Dumping on International Economy -: Data Presentation Specification :We have selected a five point “Likert” scale that carries five options and each option is assigned a specified number for its identification. All options are of equal importance and weights.Ceiling of the value: If fraction value of mean is equal or above “. Strongly Disagree Disagree Indifferent Agree Strongly Agree 1 2 3 4 5 Rounding off the Data: If the values calculated from mean are not in an absolute form then we are going to round off the data in two dimensions.
Effects of Dumping on International Economy Tabulation and Interpretation of Data: Frequency Distribution of the data according to respondents view about “effects of Dumping on economy” (Q # 1). -: Table 4. The trend observed from mean (µ) calculation shows that most of the respondents agree that the “Dumping” affect the economy. -: Table 4.2 Interpretation: Table 4.02 :Responses (x) 1 2 3 4 5 Total Frequency (f) 0 1 0 9 0 ∑ f = 10 f*x 0 2 0 36 0 ∑ fx = 38 Percentage 0 10% 0 90% 0 100% 41 .01 :Responses (x) 1 2 3 4 5 Total Frequency (f) 0 0 0 8 2 ∑f = 10 f*x 0 0 0 32 10 ∑fx = 42 Percentage 0 0 0 80% 20% 100% Calculated Mean (µ) Value: µ = 4.01 shows that out of 10 respondents 80% (8) has selected option 4 that represents “Agree” and 20% (2) has selected option 5 that represents “Strongly Agree”. --------------------------------------Frequency Distribution of the data according to respondents view about “increasing free trade gives rise to Dumping”.
The trend observed from mean (µ) calculation shows that most of the respondents agree that the increasing free trade gives rise to “Dumping” practices. 10% (1) has selected option 3 that represents “Indifferent”. and 60% (6) has selected option 4 that represents “Agree”.8 Interpretation: Table 4.03 shows that out of 10 respondents 30% (3) has selected option 2 that represents “Disagree”.02 shows that out of 10 respondents 90% (9) has selected option 4 that represents “Agree” and 10% (1) has selected option 2 that represents “Disagree”. --------------------------------------- 42 .3 Interpretation: Table 4.03 :Responses (x) 1 2 3 4 5 Total Frequency (f) 0 3 1 6 0 ∑f = 10 f*x 0 6 3 24 0 ∑fx = 33 Percentage 0 30% 10% 60% 0 100% Calculated Mean (µ) Value: µ = 3.Effects of Dumping on International Economy Calculated Mean (µ) Value: µ = 3. --------------------------------------Frequency Distribution of the data according to respondents view about “the dumping limits the international trade” -: Table 4. The trend observed from mean (µ) calculation shows that most of the responses are Indifferent which shows that they neither agree nor disagree that the dumping limits the international trade.
The trend observed from mean (µ) calculation shows that most of the responses are Indifferent which shows they neither agree nor disagree. -: Table 4.05 :Responses (x) 1 2 3 4 5 Total Frequency (f) 0 1 2 7 0 ∑f = 10 f*x 0 2 6 28 0 ∑fx = 36 Percentage 0 10% 20% 70% 0 100% 43 .04 shows that out of 10 respondents 60% (6) has selected option 2 that represents “Disagree”. 30% (3) has selected option 3 that represents “Indifferent”.04 :Responses (x) 1 2 3 4 5 Total Frequency (f) 0 6 3 1 0 ∑f = 10 f*x 0 12 9 4 0 ∑fx = 25 Percentage 0 60% 30% 10% 0 100% Calculated Mean (µ) Value: µ = 2. --------------------------------------Frequency Distribution of the data according to respondents view about “subsidies by government supports dumping” -: Table 4.Effects of Dumping on International Economy Frequency Distribution of the data according to respondents view about “dumping is possible with-out natural recourses”. and 10% (1) has selected option 4 that represents “Agree”.5 Interpretation: Table 4.
Effects of Dumping on International Economy Calculated Mean (µ) Value: µ = 3.4 Interpretation: Table 4.06 :Responses (x) 1 2 3 4 5 Total Frequency (f) 0 0 0 6 4 ∑f = 10 f*x 0 0 0 24 20 ∑fx = 44 Percentage 0 0 0 60% 40% 100% Calculated Mean (µ) Value: µ = 4. and 70% (7) has selected option 4 that represents “Agree”. The trend observed from mean (µ) calculation shows that most of the respondents agree that the “Dumping” harm the domestic industry. --------------------------------------Frequency Distribution of the data according to respondents view about “dumping harm the domestic industry” -: Table 4. 20% (2) has selected option 3 that represent “Indifferent”. The trend observed from mean (µ) calculation shows that most of the respondents agree that subsidies support the “Dumping” practices. --------------------------------------- 44 .06 shows that out of 10 respondents 60% (6) has selected option 4 that represents “Agree” and 40% (4) has selected option 5 that represents “Strongly Agree”.6 Interpretation: Table 4.05 shows that out of 10 respondents 10% (1) has selected option 2 that represents “Disagree”.
2 Interpretation: Table 4.08 :Responses (x) 1 2 3 4 5 Total Frequency (f) 0 1 0 8 1 ∑f = 10 f*x 0 2 0 32 5 ∑fx = 39 Percentage 0 10% 0 80% 10% 100% Frequency (f) 1 2 1 6 0 ∑f = 10 f*x 1 4 3 24 0 ∑fx = 32 Percentage 10% 20% 10% 60% 0 100% 45 . 20% (2) has selected option 2 that represent “Disagree”.07 shows that out of 10 respondents 10% (1) has selected option 1 that represents “Strongly Disagree”. 10% (1) has selected option 3 that represents “Indifferent”.Effects of Dumping on International Economy Frequency Distribution of the data according to respondents view about “domestic industry cartels support dumping” -: Table 4. and 60% (6) has selected option 4 that represents “Agree”.07 :Responses (x) 1 2 3 4 5 Total Calculated Mean (µ) Value: µ = 3. --------------------------------------Frequency Distribution of the data according to respondents view about “dumping increase imports” -: Table 4. The trend observed from mean (µ) calculation shows that most of the responses are indifferent which shows they neither agree nor disagree that domestic industry cartels support “Dumping”.
--------------------------------------- 46 .Effects of Dumping on International Economy Calculated Mean (µ) Value: µ = 3. --------------------------------------Frequency Distribution of the data according to respondents view about “dumping should be protected” -: Table 4. 50% (5) has selected option 4 that represent “Agree”.09 shows that out of 10 respondents 30% (3) has selected option 2 that represents “Disagree”.6 Interpretation: Table 4. 80% (8) has selected option 4 that represents “Agree”.09 :Responses (x) 1 2 3 4 5 Total Frequency (f) 0 3 0 5 2 ∑f = 10 f*x 0 6 0 20 10 ∑fx = 36 Percentage 0 30% 0 50% 20% 100% Calculated Mean (µ) Value: µ = 3. and 20% (2) has selected option 5 that represents “Strongly Agree”. The trend observed from mean (µ) calculation shows that most of the respondents agree that the “Dumping” should be protected.08 shows that out of 10 respondents 10% (1) has selected option 2 that represents “Disagree”. and 10% (1) has selected option 5 that represents “Strongly Agree”.9 Interpretation: Table 4. The trend observed from mean (µ) calculation shows that most of the respondents agree that the “Dumping” increase imports.
11 :Responses (x) 1 2 3 4 5 Total Frequency (f) 0 0 0 9 1 ∑f = 10 f*x 0 0 0 36 5 ∑fx = 41 Percentage 0 0 0 90% 10% 100% 47 . --------------------------------------Frequency Distribution of the data according to respondents view about “protectionists are threatened by dumping” -: Table 4.9 Interpretation: Table 4. The trend observed from mean (µ) calculation shows that most of the respondents agree that the “Anti-Dumping” laws are a good form of protectionism.10 :Responses (x) 1 2 3 4 5 Total Frequency (f) 0 0 1 9 0 ∑f = 10 f*x 0 0 3 36 0 ∑fx = 39 Percentage 0 0 10% 90% 0 100% Calculated Mean (µ) Value: µ = 3. and 90% (9) has selected option 4 that represent “Agree”.10 shows that out of 10 respondents 10% (1) has selected option 3 that represents “Indifferent”.Effects of Dumping on International Economy Frequency Distribution of the data according to respondents view about “anti-dumping laws are a good form of protectionism” -: Table 4.
3 Interpretation: Table 4.11 shows that out of 10 respondents 90% (9) has selected option 4 that represents “Agree”.12 :Responses (x) 1 2 3 4 5 Total Frequency (f) 1 7 1 0 1 ∑f = 10 f*x 1 14 3 0 5 ∑fx = 23 Percentage 10% 70% 10% 0 10% 100% Calculated Mean (µ) Value: µ = 2. and 10% (1) has selected option 5 that represent “Strongly Agree”. and 10% (1) has selected option 5 that represent “Strongly Agree”. 70% (7) has selected option 2 that represent “Disagree”. 10% (1) has selected option 3 that represents “Indifferent”. The trend observed from mean (µ) calculation shows that most of the respondents agree that the protectionists are threatened by “Dumping”. --------------------------------------Frequency Distribution of the data according to respondents view about “dumping is good for customer as well as economy” -: Table 4.Effects of Dumping on International Economy Calculated Mean (µ) Value: µ = 4.1 Interpretation: Table 4. The trend observed from mean (µ) calculation shows that most of the respondents are disagree that “Dumping” is good for customer as well as economy.12 shows that out of 10 respondents 10% (1) has selected option 1 that represents “Strongly Disagree”. --------------------------------------- 48 .
13 shows that out of 10 respondents 40% (4) has selected option 4 that represents “Agree”.13 :Responses (x) 1 2 3 4 5 Total Frequency (f) 0 0 0 4 6 ∑f = 10 f*x 0 0 0 16 30 ∑fx = 46 Percentage 0 0 0 40% 60% 100% Calculated Mean (µ) Value: µ = 4.6 Interpretation: Table 4. and 60% (6) has selected option 5 that represent “Strongly Agree”.14 :Responses (x) 1 2 3 4 5 Total Frequency (f) 2 6 2 0 0 ∑f = 10 f*x 2 12 6 0 0 ∑fx = 20 Percentage 20% 60% 20% 0 0 100% 49 .Effects of Dumping on International Economy Frequency Distribution of the data according to respondents view about “dumping affect the economy negatively” -: Table 4. --------------------------------------Frequency Distribution of the data according to respondents view about “dumping affects the economy positively” -: Table 4. The trend observed from mean (µ) calculation shows that most of the respondents strongly agree that the “Dumping” affect the economy negatively.
and 30% (3) has selected option 4 that represents “Agree”. --------------------------------------Frequency Distribution of the data according to respondents view about “dumping is beneficial for economy as it enhance competition among domestic and foreign producers” -: Table 4.14 shows that out of 10 respondents 20% (2) has selected option 1 that represents “Strongly Disagree”. The trend observed from mean (µ) calculation shows that most of the responses are indifferent which shows they are neither agree nor disagree that the “Dumping” is beneficial for economy as it enhance competition among domestic and foreign producers.7 Interpretation: Table 4.15 shows that out of 10 respondents 60% (6) has selected option 2 that represents “Disagree”.Effects of Dumping on International Economy Calculated Mean (µ) Value: µ = 2. 50 . The trend observed from mean (µ) calculation shows that most of the respondents disagree that the “Dumping” affect the economy positively. and 20% (2) has selected option 3 that represents “Indifferent”. 60% (6) has selected option 2 that represent “Disagree”.15 :Responses (x) 1 2 3 4 5 Total Frequency (f) 0 6 1 3 0 ∑f = 10 f*x 0 12 3 12 0 ∑fx = 27 Percentage 0 60% 10% 30% 0 100% Calculated Mean (µ) Value: µ = 2.0 Interpretation: Table 4. 10% (1) has selected option 3 that represent “Indifferent”.
CONCLUSIO. AND RECOMMENDATIONS 51 .Effects of Dumping on International Economy CHAPTER 05 FINDING.
It tells us the dumping affects the economy negatively by affecting its different components. Dumping harm the domestic industry as foreign low priced goods that are being dumped earn more market share and local industry is unable to retain the customer as they can never sell at such a low price. the conclusions as well as the recommendations drawn out from the intensive study conducted by the researcher.Effects of Dumping on International Economy This chapter presents the summary of finding of the study as gathered from questionnaire. the value of the local currency depreciates. the gross national product decreases. the gross domestic product decreases. The study represents that increasing free trade is responsible for increasing the dumping practices and the trend will increase in future. The dumping can also restrict the international free trade as the conflict can take place among the trading countries or partners when any one of them dumps. The domestic industry cartels also support dumping as the local producers come together to charge high prices in local market to earn revenue required and then they can easily sell the products in foreign market at a 52 . But situation can be vice a versa because some countries would still like to enhance their trade with other countries. So if the production unit shuts down in a country it affects certain components of the economy like the unemployment increases. The subsidies given by the government really helps dumping because producers has to pay less tariffs and quotas and they can produce more cheaply in foreign countries. Summary of Findings: The study attempts to determine the effects of Dumping on economy. We are able to determine that dumping can be practiced by a country whether it has sufficient resources or not. According to our research we are able to find out that dumping do affect the economy. They have to full fill their costs.
The people may get cheaper goods which can be a gift for them but the economy has to pay the cost. According to this study they are a suitable form of dumping. This will be help full for the expansion of their business. monopolists or the industrialists in an economy. The inflow of money decreases and the outflow of money increases. The study tells us that the dumping can be useful for customers but it is always harmful for economy. The study also tells us that some times dumping increases the competition in local industry where the goods are being dumped but other wise situation can also has equal chances of occurrence. The imports of the country increases where the goods are being dumped. quotas and antidumping laws as well. The protectionists are the people who are in favor of restricting dumping and they can be government. This study informs us that the protectionists are the people who are really fear dumping because according to them they will the most harmed people. The destruction of industry will cause to decrease the business expansion and domestic production. 53 . The demand of foreign currency will increase as the imports are increased and the excess supply of local currency in foreign exchange market will cause to decrease the exchange rate of local currency. The competition is increased as the local producers also try to decrease the cost of production and quality of their product but some times such situation does not occur. Then they can easily dump in foreign countries at a very low price to earn market share. There are different methods for protecting the economy from dumping. Anti dumping laws are widely accepted forms of protection. We can use tariffs. So people will hesitate to take loan and start business so the rate of interest will also decrease. The balance of payment of that country goes into deficit as foreign payments increase and the receipts decreases.Effects of Dumping on International Economy price below costs. This creates pressure on the local currency and the value of currency decreases as compared to foreign currencies. The study tells us that dumping being harm full for economy should be protected.
Different countries around the world dump to each others‟ markets. 4) WTO should make sure that lesser dumping practices should take place. The anti-dumping laws are being implied by the countries to protect their economy. unemployment and exchange rates. 54 . Dumping can originate from natural resources. The protection from dumping is very important. The domestic industry has to face the destructive effects of dumping and so are the other components of economy like gross domestic product. The dumping can provide customers with the cheaper products but it can be very costly for the economy. The standard of living can not be enhanced by having cheaper available goods but it can be improved by increasing the per capita income. So the economy should be protected from dumping for progress and development. 6) Countries should not give the unnecessary subsidies or favors that give rise to the dumping practices. These harm full effects of dumping can bring economy on the verge of destruction. Recommendations: There are some recommendations that are based on the study. These recommendations are as follows 1) The dumping affects the economy adversely so governments and other regulatory authorities should try to protect the economy when the dumping cases are filed. gross national product. 5) It should define more antidumping law that should restrict the dumping with out harming the purpose of free trade. The effects of dumping on economy are negative. cheaper factors of production or subsidies given by the government. 2) The industry should be protected by the use of antidumping laws which are very good form of protection. quotas and taxes should also be implemented to protect the industry form dumping.Effects of Dumping on International Economy Conclusion: The study tells us that dumping obviously affects the economy. 3) Tariffs.
gross national product and the currency value. not with a competition in between local and foreign products.Effects of Dumping on International Economy 7) The government should intervene to break the cartels that are the cause of dumping in industry so the perfect competition may take place. 13) Competition among the local producers can be enhanced by giving more and more local people a chance for entering the business and providing them resources to compete. This will not only increase the per capita income but also save from the trade deficit. 11) The industry should be efficient enough so that the exports may increase and imports may increase. 10) The human resources of the country should be utilized in an efficient way by giving them the appropriate training and skills so their productivity can be increased. 8) To compete the other countries products that are low-priced and better quality. 9) The governments should explore and utilize the natural resources available in the country and produce more efficiently and cheaply. 12) The foreign low priced goods can be gift for customer but they does not reflect better standard of living so local production can not only enhance the standard of living but also increase the jobs. 55 . government should force the industry to increase the efficiency and production level. gross domestic product.
Effects of Dumping on International Economy Survey Questionnaire Purpose of Study: This study is being conducted in order to determent the effects of “Dumping” on economy. Q # 01: Do you think “Dumping” effect economy? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 02: Do you think increasing free trade gives rise to dumping practices? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 03: Do you think “Dumping” limit the International trade? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 04: Do you think “Dumping” is possible with-out natural resources? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 05: Do you think subsidies give by government supports “Dumping”? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 06: Do you think “Dumping” harm the domestic industry? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 07: Do you think domestic industry cartels support “Dumping”? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree 56 . Direction: Please mark the appropriate box against each question.
ciit.edu.Effects of Dumping on International Economy Q # 08: Do you think “Dumping” increase imports? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 09: Do you think “Dumping” should be protected? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 10: Do you think “Anti-Dumping” laws are a good form of protectionism? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 11: Do you think protectionists are threatened by “Dumping”? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 12: Do you think “Dumping” is good for customer as well as economy? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 13: Does “Dumping” affect the economy negatively? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 14: Does “Dumping” affect the economy positively? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree Q # 15: Do you think “Dumping” is beneficial for economy as it enhance competition among domestic and foreign producers? 1 Strongly Disagree 2 Disagree 3 Indifferent 4 Agree 5 Strongly Agree COMSATS Institute of Information Technology (CIIT) Lahore. URL: www.pk 57 .
org Books: Research Methods For Business By Uma Sekaran International Financial Management By Jeff Medora International Business By Charles W.ciit.L.google.edu.wikipedia.com www.pk (Digital Library) www.ask.yahoo.jstor. Hill 58 .en.Effects of Dumping on International Economy -: Bibliography :Institutions COMSATS Institute of Information Technology Lahore (CIIT) Punjab University Lahore (PU) University of Management Sciences Lahore (UMT) PakAims Lahore Superior University Campus Lahore Web Sites: www.com www.org www.com www.
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