standard technical definition of dumping is the act of charging a lower price f

or the like goods in a foreign market than one charges for the same good in a do
mestic market for consumption in the home market of the exporter. This is often
referred to as selling at less than "normal value" on the same level of trade in
the ordinary course of trade. Under the World Trade Organization (WTO) Agreemen
t, dumping is condemned (but is not prohibited) if it causes or threatens to cau
se material injury to a domestic industry in the importing country.[1]
The term has a negative connotation, as advocates of competitive markets see "du
mping" as a form of protectionism. Furthermore, advocates for workers and labore
rs believe that safeguarding businesses against predatory practices, such as dum
ping, help alleviate some of the harsher consequences of such practices between
economies at different stages of development (see protectionism). The Bolkestein
directive, for example, was accused in Europe of being a form of "social dumpin
g," as it favored competition between workers, as exemplified by the Polish Plum
ber stereotype. While there are few examples of a national scale dumping that su
cceeded in producing a national-level monopoly, there are several examples of lo
cal 'dumping' that produced a monopoly in regional markets for certain industrie
s. Ron Chernow points to the example of regional oil monopolies in Titan : The L
ife of John D. Rockefeller, Sr. where Rockefeller receives a message from Colone
l Thompson outlining an approved strategy where oil in one market, Cincinnati, w
ould be sold at or below cost to drive competition's profits down and force them
to exit the market. In another area where other independent businesses were alr
eady driven out, namely in Chicago, prices would be increased by a quarter.[2]Ac
cording to footnote 2 Anti-Dumping Agreement, domestic sales of the like product
are sufficient to base normal value on if they account for 5 per cent or more o
f the sales of the product under consideration to the importing country market.
This is often called the five-per-cent or home-market-viability test. This test
is applied globally by comparing quantity sold of like product on the domestic m
arket with quantity sold to importing market.
Normal value cannot be based on the price in the exporter s domestic market when t
here are no domestic sales. For example, if the products are only sold on the fo
reign market, the normal value will have to be determined on another basis. Addi
tionally, some products may be sold on both markets but the quantity sold on the
domestic market may be small compared to quantity sold on foreign market. This
situation happens often in countries with small domestic markets like Hong Kong
and Singapore, though similar circumstances may also happen in larger markets. T
his is because of differences in factors like consumer taste and maintenance.
Calculating the extent of dumping on a product is not enough. Anti-dumping measu
res can only be applied if the act of dumping is hurting the industry in the imp
orting country. Therefore, a detailed investigation must first be conducted acco
rding to specified rules. The investigation must evaluate all relevant economic
factors that have a bearing on the state of the industry in question; if it is r
evealed that dumping is taking place and hurting domestic industry, the exportin
g company can raise its price to an agreed level in order to avoid anti-dumping
import duties.[citation needed]
Procedures in investigation and litigation[edit]
Detailed procedures are set out on how anti-dumping cases are to be initiated, h
ow the investigations are to be conducted, and the conditions for ensuring that
all interested parties are given an opportunity to present evidence. Anti-dumpin
g measures must expire five years after the date of imposition, unless a review
shows that ending the measure would lead to injury.
Generally speaking, an anti-dumping investigation usually develops along the fol
lowing steps: domestic producer(s) make(s) a request to the relevant authority t
o initiate an anti-dumping investigation. Then investigation to the foreign prod
ucer is conducted to determine if the allegation is valid. It uses questionnaire

s completed by the interested parties to compare the foreign producer's (or prod
ucers') export price to the normal value (the price in the exporter s domestic mar
ket, the price charged by the exporter in another country, or a calculation base
d on the combination of the exporter s production costs, other expenses and normal
profit margins). If the foreign producer's export price is lower than the norma
l price and the investigating body proves a causal link between the alleged dump
ing and the injury suffered by the domestic industry, it comes to a conclusion t
hat the foreign producer is dumping its products. According to Article VI of GAT
T, dumping investigations shall, except in special circumstances, be concluded w
ithin one year, and in no case more than 18 months after initiation. Anti-dumpin
g measures must expire five years after the date of imposition, unless a review
shows that ending the measure would lead to injury.
Anti-dumping investigations are to end immediately in cases where the authoritie
s determine that the margin of dumping is, de minimis, or insignificantly small
(defined as less than 2% of the export price of the product). Other conditions a
re also set. For example, the investigations also have to end if the volume of d
umped imports is negligible (i.e., if the volume from one country is less than 3
% of total imports of that product although investigations can proceed if several
countries, each supplying less than 3% of the imports, together account for 7% o
r more of total imports).
The agreement says member countries must inform the Committee on Anti-Dumping Pr
actices about all preliminary and final anti-dumping actions, promptly and in de
tail. They must also report on all investigations twice a year. When differences
arise, members are encouraged to consult each other. They can al