PHEARL ANJEYLLIE M.

PILOTON BSMA III-MA31

Dumping increases the global exchange of the dumped product due to a

weakening in its trade price, Amadeo (2020). Mostly dumping occurs when
companies in a country lower the selling price of their products in order to
increase market share unethically. They might lower the price below the real cost
of production. Other consequences of dumping depend on what kind of
dumping the country has, therefore, the adequacy of dumping differs from case
to case. In such circumstances, dumping is a method by which competitive
outcomes are calculated, in part by the alteration itself, not by the relative
competitiveness of individual manufacturers. According to Howel (1997),
dumping allows protected companies to operate their facilities at higher
utilization rates than would be economically feasible in an open market, giving
them a significant cost advantage, which is not linked to their comparative cost
competitiveness. He also added that over the long run, dumping can discourage
investment in the market where it is occurring and, on the other hand, may well
foster increased investment in the protected market. Dumping enables
consumers in the importing country to have access to goods at a reasonable
price. Nevertheless, the local market of the importing country may also be ruined,
which may lead to lay-offs and the closure of businesses.

Even though the consumers are benefited on the lower prices sets by the exporter
companies, the consumers might experience disadvantages through them.
Once the company wins the heart of the consumers there is a possibility that the
domestic competitor might lose its edge and may lead to kicking out the business
in the market. So once the exporter company succeed to its plan, there is a risk
affiliates to it through creating a monopolistic market by which they have the
opportunity to determine the prices they want so there is a chance of setting
higher prices which will, in the end, hurt consumer. Due to this risk, anti-dumping
was created. Anti-dumping is a well-known legal instrument that purportedly
counteracts the practice of dumping by a foreign exporter. Dumping deforms the
comparative advantage because it provides domestic producers with distorted
information about the market. Anti-dumping also plays the role in preventing from
even greater protectionist abuse. And based on the statement of Sohn (2005), if
a sporter involves in unfair pricing in a foreign market with the aim of driving out
mandatory procedures, it should be responded by a give-and-take anti-dumping
duty that will counterbalance the outcome. Still, anti-dumping policy is now the
subject of mocking attacks from many quarters, with bulging figures in law,
business, etc. In spite of the positive effect of this policy, it contains also negative
effect so exporter companies are directly affected to this decision.