Effects of Dumping on International Economies and Trade

Research Methods for Business
( Final Project )
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
2
Submitted to:
Sir Amir Rashid
By:
Khalil-ur-Rahman (028)
Hassan Akram (024)
Hafiz Muhammad Ahmad (020)
Muhammad Saleem (052)
Atif Javid (012)
Hira Pervaiz Malik (086)
Usman Khalid (084)
3
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
4
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
5
-: Acknowledgement :-
First and foremost, we must praise the ONE, worthy of all praise, ALLAH
THE ALMIGHTY, the source of all wisdom and creation, for HIS immense
bounties and never- ending mercy.
Our special praise to the HOLY PROPHET HAZRAT MUHAMMAD
(Peace Be Upon Him) who is forever a torch of guidance for mankind.
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,
who are enablers of Eco-balance, fruitful over arched trees, who work in an
environment of close coordination and instant cooperation. 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, talented and Professional teachers,
who generates what we need. They have steady, deep-rooted, generous nature,
regardless of color, cast and creed.
We also wish to acknowledge from the inmost core of our heart of hearts,
the invaluable guidance, and significance support and meaning cooperation
provided by
Sir Amir Rashid advisor of the project, without his guidance the project would
have remained mere a dream.
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.
May ever-ending success and ever-lasting happiness be the lot of them all
(Aaameen)
6
CHAPTER 01
THE PROBLEM AND ITs

BACKGROUND
7
Introduction:
The world economy has the trend to move towards the free trade from last two
decades and the trend has boosted recently. The concept of Free trade has supported the
international economy by increasing the interconnectivity of the world economies. This
phenomenon of free trade gives rise to certain questions and also has certain limitations
and advantages for the countries around the world. This phenomenon emphasizes the
specialization of different countries in the fields in which they have more resources for
production than the other countries. This specialization will give trend to dumping which
is a threat to the domestic industry around the world. People think that the phenomenon
of dumping is to be hindered to save the domestic industry. So the trend of dumping
gives rise to the concept of protection. It is said that the protection not only saves the
domestic industry but also protect the countries condition.
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. So these two entities of
dumping and protection are the main concern in this regard.
There are some important components of economy that will obviously be affected by
practicing dumping. One of the components is gross domestic product (GDP) and the
other is the gross national product (GNP) of that country. They are also effected
positively or negatively to effect the over all economy condition. The other economic
factors like employment rate and currency value are also affected. It is said that the
dumper‟s country gets all the benefits that are losses for the country where it is dumping.
Today‟s economy has become a knowledge economy and the people around the
world are more knowledgeable about the international affairs. They want to have more
choice when they intend to buy. The cheaper goods are one of the most preferred choices
for the customer around the world. So they would like the foreign cheaper products to be
imported in their domestic market. The dumpers sell their specialized products in that
country at lower prices than the domestically produced goods to capture more market,
which they will obviously do because of their low costs. It is said that these low cost
goods are a gift for customer but they destroy the industry and economy. Government
wants to reduce the imports to improve the domestic industry and the balance of payment
8
to support the economy. 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.
Back ground information:
Dumping and anti-dumping cases can be dated back to very early days in
international trade. However, for a long time, very few cases of repelling imports through
anti-dumping actions took place. This situation continued until 1950s when more anti-
dumping cases began to take shape. From January 1, 1995 to June 30, 2003, the period
witnessed 2284 anti-dumping investigations launched by the WTO members.
Dumping and anti-dumping cases can be dated back to very early days in
international trade. However, for a long time, very few cases of repelling imports through
anti-dumping actions took place. A country might launch two or three such cases at the
most in a year.
This situation continued until 1950s when more anti-dumping cases began to take
shape. Statistics by then Ministry of International Trade and Industry (now Ministry of
Economy, Trade and Industry) of Japan recorded an annual average of 30 international
anti-dumping lawsuits in 1950s and 1960s, about 40 in 1970s, and a surge to 174 in
1980s.
From January 1, 1995 to June 30, 2003, the period witnessed 2284 anti-dumping
investigations launched by the WTO members.
Frequently being put under anti-dumping scrutiny, 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.
India, Argentina, Brazil and South Africa are typical examples in this aspect.
From January 1995 to June 2003, developing countries and regions launched more than
half of the anti-dumping investigations. India led the world with its 344 attempts,
exceeding the US 308 cases. On the other hand, the developed world generally also
intensified their anti-dumping campaign.
Take the US for instance, in 2001, the US launched up to 74 anti-dumping

investigations as against its 14 cases in 1995. Products involved in the cases were mostly
9
labor-intensive ones, such as metal and metal products, chemical product, mechanical and
electrical products, 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, thus bringing
damage to related industry in the import 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. It also specifies direction of the relationship. Here the independent variable is
dumping that is our primary concern. Now dumping is going to affect the international
economy which is our dependent variable. When the dumping is practiced it affects the
international economy. So we are able to determine the relationship among the variables.
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.
Dumpers provide the product at the prices lower than the price prevailing in the domestic
market in a specific country. Consequently the people start buying that product. So the
imports of that country will increase. This will obviously affect the economy and to
determine this impact we need to break down economy into certain components due to its
10
subjective nature. So this effect can be measured by measuring the impacts on

components of economy like GDP, GNP, currency value and the unemployment. The
local industry will obviously be affected. All these factors will affect the economy of that
country. So economy being a dependent variable will be affected by dumping.
The moderating variables here are protection and free trade. The protection affects
the intensity of the relationship among dumping and international economy. By
implementing the protection means we will impose certain tariffs, quotas, taxes and
duties on dumped goods. This will increase the prices of dumped goods and people will
not buy them. This will provide protection to local industry as well as economy and any
type of dumping will not be able to affect the 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.
The intervening variables here are natural resources, government subsidies and
cartels. 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.
This is also called comparative advantage of that country on other countries. The
subsidies given to a specific industry by the government also gives rise to cheaper
production. This will enhance the chances of dumping effects on economy more.
The industrial cartels in a country also give rise to dumping practices. The industrialists
in a specific industry come together and sell at same price at home market to abolish
competition. 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. This
is how more dumping takes place.
11
-: Figure 1.01 :-
12
-: Figure 1.02 :-
13
-: Figure 1.03 :-
14
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.
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. Now we
are in position to test whether the relationships that have been theorized do in fact hold
true or not. For this purpose we formulate some statements from the variables and their
relationship to perform tests. Formulating such testable statements is called Hypothesis
development.
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. By testing the hypothesis and confirming
the conjecture relationship, it is expected that solutions can be found to correct the
problem encountered.
Hypothesis:
Null Hypothesis :( Ho)
A null hypothesis is that,
“The dumping affects the economy.”
The alternative Hypothesis: (Ha)
The alternative hypothesis is that,
“The dumping does not affect the economy.”
Kind of Hypothesis
Our hypothesis is non-directional kind because the relationship of variables does not
show any direction or proportion.
This research specifically provides an answer to the following questions that are
as follows:
1) - Do the dumping affect global economy?
2) - What are the possible impacts of dumping on international trade?
15
3) - What are the suitable protections that are implemented by countries around the
world?
4) - The impact of dumping on different components of economy like GDP, GNP,
currency value and employment?
5) - How are countries around the world affected by dumping?
6) - 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.
Countries around the world are involved in trade to stabilize their economies. They are
much concerned about the trends being followed in international trade, consequently they
try to protect or benefit their economies from good or bad impacts of these trends. 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.
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. 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, the expansion of production by
transnational corporations to many countries around the world. The global economy
includes the globalization of production, markets, finance, communications, and the labor
force.
16
Protection:
The term protection is defined as Restriction of international trade by a
government in order to shelter domestic producers from foreign competitive pressures.
Protectionism supports the policy of charging foreign traders a tax, or tariff on imported
goods.
Subsidies:
Government grants to local producers to assist in the production of particular
crops or goods. 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, when they
otherwise would not be. This leads to unfair competition and lower returns for those
producers producing the good without assistance, and rewards those whose production
processes may be inefficient.
Cartels:
A combination of independent business organizations formed to regulate

production, pricing, and marketing of goods by the members.
Natural resources:
Resources occurring in nature that can be used to create wealth. Examples include
oil, coal, water, and land.
17
CHAPTER 02
REVIEW OF RELATED
LITERATURE
18
-: Article # 01 :-
Dumping: the Beginning of the End?

Oxfam Briefing Paper. June 2004
Despite their WTO commitments to reduce trade-distorting subsidies, the
European Union and the United States have used loopholes and creative accounting to
continue dumping products on world markets. In the case of US cotton subsidies, the
dispute settlement body of the WTO concluded that such practices hurt developing
countries and are in violation of WTO rules. This landmark case sends hope to millions
of impoverished cotton farmers in West Africa. And it might be the beginning of the end
for US and EU dumping.
Since the ministerial conference in Cancun, cotton has been a major item on the
WTO negotiation agenda. Cotton symbolizes the unfairness of current subsidy practices
of the United States, as doe‟s sugar for the European Union. In West Africa alone, 10
million people depend on cotton for their livelihoods. US cotton dumping, causing a
sharp decline in world cotton prices, has impoverished all of these farmers. Following a
complaint by Brazil at the WTO, a dispute settlement panel has found that US cotton
subsidies are contrary to WTO rules. This decision is a giant step forward in the fight
against dumping. The WTO panel found that $3.2 billion in US cotton subsidies and $1.6
billion in exports credits (for cotton and other commodities) are against WTO rules. This
represents almost all cotton subsidies and close to 50 per cent of all export credits used by
the USA in 2002.
The panel found that the USA used hidden export subsidies to circumvent its
WTO commitment to reduce export subsidies. 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 means that the USA will have to reform its current practices.
Moreover, the USA misreported certain programs as „non trade distorting‟ when in fact
they were
19
Wider implications:
The panel ruling will have profound political implications that go beyond the
specific case of the USA and cotton.
The key demand of West African countries for a drastic reduction in US cotton
subsidies has also been fully justified.
The example of cotton proves that most subsidies currently used by the USA and
the EU are damaging to developing countries. 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.
• Under current rules, with the expiry of the peace clause, all subsidies can now be
challenged by developing countries in the Dispute Settlement Understanding (DSU) on
the grounds of serious prejudice. While this case only pertains to cotton subsidies, the
same principles could apply if developing countries were to bring similar challenges
about other highly subsidized crops such as soybeans or rice.
• Following the Canadian dairy and the US cotton panels, it is now legally
established that developed countries failed to abide by subsidy rules that they had crafted
during the Uruguay Round, Hence, developing countries have won an important moral
and legal victory, gaining a stronger position in multilateral negotiations.
Why the USA should implement the ruling
The USA will undoubtedly appeal this ruling. If it loses in appeal, which is likely,
the USA will be at a crossroads. It can either choose to implement the meeting in good
faith or face possible trade sanctions by Brazil. However, the USA would have a lot to
lose by failing to implement this ruling in a meaningful way.
• 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.
• A lost chance to reduce EU subsidies. 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.
20
• A lost opportunity to respond to legitimate demands made by West African

countries to eliminate trade-distorting cotton subsidies. This would be a continuing
source of problems for the USA at the WTO.
• A weakening of the WTO rules-based system, of which the USA is a major
beneficiary.
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.
------------------------
-: Article # 02 :-
Is the ‘global free trade’ at risk?
By Mehmood-ul-Hassan Khan
Cross-border trade flows are the glue of globalization. Globalization is a

phenomenon that has remade the economy of virtually every nation, reshaped almost
every industry and touched billions of lives, often in surprising and ambiguous ways.
Despite the dawn of world trade organization [WTO] from January 1, 2005 major
economic super powers of the world are taking anti-free trade policies. The imposition of
GSP by the EU on Pakistan‟s textile exports, and anti-dumping duties imposed by
different countries on the products of our country showed the other side of picture of free
trade. The EU imposes Seafood ban on imports from Pakistan and French farmers ask for
the subsidiary from the government.
Global economy and especially national economies have taken over by tight and
to some extent rigid concept of nationalism. It is seemed that concept and functionality of
free trade is now at risk. 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, EU,
China and now Japan is the new addition to that tally of "Protectionism" or anti-free trade
concept. In the recent past especially, US provoked to follow the policies of pure and
severe nationalism rather than principles of international economics. Protective measures
21
against the textile products of China by EU and US started the great blame game of
economic with the blend of nationalism. The China national offshore oil corporation
[CNOOC] withdrew its bid for US Oil Company. Unocal, citing unprecedented political
opposition and now Tokyo, acting within the guidelines of a WTO decision against
Washington on steel tariffs, 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. To appease concerns by that, the US and EU and China have already
abolished export tariffs on 81 categories of textile products.
The establishment of US‟s, the "Mecca of Corporate Gospel", has forced the
Chinese National Oil Company to withdraw its bid for the purchase of Unocal. On the
direct pressure, Bush administration and politicization of a economics Unocal finally
refused to accept a Chinese firm‟s take-over bid on flimsy grounds, (threat to national
security) although its offer of $18.5 billion was higher than rival Chevron‟s which was
$17.3 billion. It was no doubt a blasphemous act, and against the true and simple spirits
of free trade. Switzerland and Japan are the main investors in American corporations but
nobody in Washington would like to call them a threat to US security.
The CNOOC‟s bid to take over Unocal collapsed, after both houses of the
republican controlled congress, agreed to propose a bill that would require the
departments of defence, energy and homeland security to investigate the bid before it was
vetted through normal administrative procedures. The congressional pressure, which
promised to delay a successful CNOOC take-over, 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, 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. It was fuelled by the mobilization of popular sentiment
against China over US job losses, which made congressional opposition to CNOOC‟s bid
politically measure and the administration‟s compliance in it politically prudent.
22
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. 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. At present, US investment in
China is 13 times greater than Chinese investment in the US. If overseas mergers and
acquisitions were really to pose any threat to a country‟s security, then it is China, which
should be feeling worried. Wal-Mart now operates 47 stores in China and intends to
spread throughout the country, destroying local businesses in towns and villages. Beijing
has raised no alarm, nor described it a threat to its people‟s livelihood. McDonald‟s
already has 600 outlets and KFC 1,000. McDonald‟s and Starbucks are already in the
Beijing‟s centuries-old palace complex.
On August 3, 2005, Tokyo announced its imposition of punitive tariffs on a range

of US goods. Including ball bearings and aircraft components, in retaliation for the failure
of congress to repeal the Byrd Amendment, 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. Tokyo had argued successfully before the WTO
that the Byrd Amendment violated international trade agreements because it, not only
penalized Japanese producers, but also rewarded their US competitors. Japan became the
latest major US trading partner to impose sanctions to protest a US anti-dumping law,
taking the unprecedented step of levying punitive tariffs on 15 US goods including steel.
The tariffs will cost US exporters more than $50 million and be set at 15 per cent from
September 1, 2005 in line with similar moves by Canada and the EU against the so-called
Byrd Amendment. With the retaliatory measures, Japan‟s imports from the US could fall
by up to $52.1 million a year, the ceiling approved by the WTO.
Since the WTO decision, the Bush administration has sought to have the Byrd
Amendment revoked, but congress has dragged its feet. As in the CNOOC affair,
powerful US business interests are on both sides of the steel tariff issue, with US steel
producers predictably in favor of keeping the Byrd Amendment in force and steel
consuming industries in favor of its repeal. In the case of the Byrd Amendment, the
purely economic balance of power would seem to favor the forces for repeal, since steel
23
consumers are more financially powerful and greater in number and political influence
than steel producers.
Signs of growing economic nationalism in the US are on the rise. There is popular
resistance to liberalization of global markets finds reverberation in congress. As rising
economic powers throughout the world become more competitive, the US is bound to
lose comparative advantage in many industries, setting off moves for protection that will
be opposed by industries that gain or maintain advantage.
------------------------
-: 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. As specified by the World Food
Summit in 1996, "Food security exists when all people, at all times, have physical and
economic access to sufficient, safe and nutritious food to meet their dietary needs and
food preferences for an active and healthy life. This essay raises some key issues, not to
resolve them, but to assure that they are on the agenda.
Subsidies and dumping:
Many countries subsidize selected food producers, directly or indirectly, resulting
in overproduction in those sectors.
To relieve the glut, some of these countries "dump" the products into poor
countries. Reducing tariffs on primary commodities makes it easier for rich countries to
dump their primary commodities into poor countries.
Dumping can do severe harm to food producers in the receiving countries. Since
much of the employment in poorer countries is in small-scale food production, dumping
can reduce the incomes of large parts of the population, thus reducing their food security.
Large shares of the subsidies that are provided go to larger producers who are well off
and have reasonable alternatives.
24
They receive subsidies primarily as a result of their political power rather than
their need. This "welfare for the rich" should be sharply reduced or eliminated.
However, the subsidies to poor, small-scale producers who have few alternative means of
livelihood are a different matter.
These producers may be inefficient by common economic criteria. However,
subsidizing them may be good public policy, in those subsidies to small-scale food
producers are part of the social safety net. For this purpose, subsidies to small-scale food
producers who produce for local consumption (not export) can be very cost effective.
While subsidies to small-scale producers are not economically efficient, they may be
socially efficient.
Discriminatory tariffs, discriminatory pricing:
Many other issues are being neglected, especially issues affecting poor countries.
There is currently a pattern of "escalating tariffs" under which tariffs are pushed down on
primary commodities but left high on processed foods. Reducing tariffs on primary foods
but not on processed food is discriminatory, preventing poor countries from engaging in
more profitable value-added (processed) food industries. The liberalization of food trade
through the reduction of tariffs should be accomplished in a way that does not
discriminate against poor countries.
Even without discriminatory tariffs, the pressure on poor countries to open their
domestic markets to foreign food suppliers can be very harmful to them. Local food
producers in poor countries may not be able to compete with the imports. The result that
their incomes plummet, destroying their food security. The effect of cheap imports can be
devastating.
In the idealized marketplace, the prices for the same product of the same quality
would be the same throughout the world, with variations only due to transportation costs.
The United Nations Development Program observes, “. . . rich producers are paid more
than poor ones for identical goods.”2 Their labor is paid less as well.
Richer countries promote trade liberalization in a way that suggests it would be beneficial
to all, but it is not equally beneficial. Trade tends to provide its greatest benefits to those
who are more powerful. It contributes to the widening of gaps between rich and poor
25
On balance, food flows from food deficit countries to countries that have more than
enough. The poor feed the rich.
The foreign exchange that compensates for the outflow of food could be used to
meet the food needs of the poor, but often it is not. The poor are politically weak, and do
not control how foreign exchange earnings are used.
The priority of human rights food is so essential to human nutrition; health, and general
well being, food trade should be managed on the basis of the obligation of all states and
other actors to respect human rights, particularly the human right to adequate food.
------------------------
-: Article # 04:-
The Dumping, not the Response, is the Issue
By Greg Mastel
Director, 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. The actual problem is not to discuss the nature of
protection or antidumping law but to eliminate such practices that support it.
The focus should be the problem of dumping, not antidumping duties. The typical
example is Japan dumping in US steel industry which is being restricted by new duties
imposed by US law. The steel Japan exports to the United States are dumped. 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.
The Japanese steel industry use dumping as a way of building market share in the
world steel market. 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. Mexican companies use
26
the domestic profits to finance dumping in US and this dumping causes serious injury to
U.S. firms and puts U.S. workers out of their jobs.
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. 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, 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, Russia and Brazil. These countries are selling steel in US at below
the cost of or below the cost at home market. The critics are of the view that it gives the
opportunity the consumer to enjoy cheaper steel that shows their shortsightedness.
Actually this low price will destroy the US steel industry and this will have diverse
effects on economy.
So the author here gives us three reasons for why should we counter this dumping
effort. 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.
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. The
world steel market is deeply distorted by subsidies, cartels and national industrial policies
that support dumping. In a recent study it is found that consumer benefits of dumping
27
were rapidly outweighed by the negative impact of the economic losses in the steel
industry.
Finally, the steel industry is an internationally competitive and valuable
component of the U.S. economy. Further, steelworkers are so productive that they are
able to command wages almost twice as high as those of the average U.S. job.
So the dumped foreign goods can be a gift to consumer but it‟s destruction for the
economy in disguise.
------------------------
-: 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. 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, least of all, the well-being
of the world's poorest people. Because the United States wanted to protect its domestic
agriculture programs that‟s why the topic was not given much importance. At the last
WTO meeting in Doha, Qatar, 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. Both the European Union and the
United States promote the ideology of free trade, but both also want to keep their farm
subsidy programs in place. For that, 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. It is found that freer trade
"has cost the poor jobs and income, has increased rural poverty and inequality, and has
wiped out small farms and communities." Even when increased agricultural trade brings
28
more revenue to some countries, it is the very big farmers and multinational. Agricultural
policies in the United States and Europe cause trouble for those developing countries that
do open their markets by encouraging dumping that is, selling goods below the cost of
production.
Dumping may be related to the existence of domestic subsidy programs, but it

isn't the same thing. It would be possible to guarantee that U.S. farmers are paid at least
the full cost of production, to limit crop production, and to prevent crops from being
exported at a below market price. Doing this would reduce the volume of U.S. exports
and allow farmers in the United States and in most other countries to come out ahead
financially.
Government support payments compensate for only a small part of that shortfall
for most farmers. And those payments were concentrated among the largest and richest
farmers, 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.
Cargill-and the handful of other companies that dominate the global grain trade-
profit from selling this cheap grain, and processors, like Archer Daniels Midland, or end
users, like food giants from Coca-Cola to Tyson's, benefit from these low-cost
agricultural products. 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.S. corn.
European milk is dumped in Central America, destroying its indigenous dairy

industry, and the dark meat that is less prized in European and American chicken markets
is dumped in Senegal or other countries, wiping out flourishing domestic poultry
industries. The milk is subsidized, but the chicken isn't. Both cases of dumping have the
same deleterious effects.
In the eyes of some free trade theorists, the consuming countries should be
delighted at getting cheap food at less than "L the cost to produce it. Some countries can
benefit, especially if they do not have a big farming economy (like Saudi Arabia). But by
29
destroying the still-large agricultural sectors in most other countries, low price imports
depress domestic agricultural markets around the world-markets that are needed for
development. If all dumping were halted, developing country economies would be
strengthened, as people in the rural sector would have more income to buy goods, educate
children, and improve their livelihoods. And the transition of the workforce out of
agriculture could be managed more humanely.
------------------------
-: Article # 07 :-
Dumping as a method of competition in international trade

Jacob viner
The university journal of business vol.1no, 2 (February 1923)
There are different type of dumping which have different point of view and
classified differently .there are open ,concealed, reverse and export dumping .for the
purpose of economy it is classified into motive and degree of continuity of the dumping .
In this situation if the producer may find that its seasonal stock is not running
successfully at the labeled price .so there are three situations which he can face
1. he can hold the surplus stock to sell it in other season

2. by minimizing the prices he can increase the sale
3. Sell the product in unimportant market at best prices.
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 .so he do not want to deprive of the estimated profit.
30
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. 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. 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 .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 concern may sell at dumping prices in a given market in order to eliminate the
competition in the market. the country which produce the products dump the products
.this most dangerous type of dumping in the world as china is doing to day .this is big
threat for American commerce department .because their domestic products are totally
disturbed .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.
In order to keep monopoly of product some producers keep their prices low .if they raise
the prices can be threat full for them because there is chance of competitor in the market.
So in order to keep monopoly for long time producer may adopt this strategy .dumping
may be used as defense against cutthroat competition.
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 .a increase in the domestic prices may
be unprofitable especially if the domestic demand for his product is inelastic, in absence
of resort to dumping. In this way he can extend his plant so as to obtain the economies of
large scale production.
------------------------
31
-: Article # 08 :-
Antidumping: A Villain in International Trade
From Sarut Wittayarungruangsri

Now one question can be answered. How unfair is dumping? Dumping is actually
fair. The thing is this question was put wrong at the beginning and the beginning was
long time ago. Looking back through time, the first antidumping law was meant to
remedy unfair trade, namely dumping, but it has become clearer over time that there is
nothing wrong with dumping. It benefits people in poor countries by offering lower
prices and new varieties of merchandises. Despite its evil name, dumping does a good
job. If the world is looking for free trade, accepting international price discrimination is
one step to be taken.
What has actually gone wrong is antidumping. Today it is nothing but a pure
protection in disguise, and it has proved itself a bad policy. Why?
Where dumping takes place, a domestic industry may file a petition against
foreign dumping firms. The details of antidumping process vary across countries, but in
general before antidumping duties can be imposed on allegedly dumped imports, two
conditions have to be fulfilled. First, dumping margin must exist. The margin is the price
difference between the normal value and that charged by alleged dumpers in the domestic
market. Second, there must be evidence that the domestic industry is materially injured
by dumping. When both are satisfied, the government can impose antidumping duties,
usually equal to the sizes of dumping margins, on imports from the dumping firms.
In a way, antidumping duties work like import tariffs. This implies that the
domestic industry can strategically use this instrument to target only foreign firms it
32
views as competitive rivals. And, being selective, antidumping measures also generate
more negative effects than tariffs do.
Consumers are clearly worse off because they have to bear the cost of duty.
Imports become more expensive. Furthermore, there is no guarantee that the domestic
producers will keep their prices at the initial levels. Depending on price elasticity, they
can obtain higher profits by setting a new price higher than before but lower than those of
dumped products.
Things become worse when dumped imports are intermediate goods. One may
think about steel for example. It is certain that consumers who purchase steel as a final
good are worse off. But now there are more people negatively affected by the duties.
Corinne Krupp and Susan Skeath, from Duke University and Wellesley College
respectively, examine whether productions in downstream industries are significantly
undermined by the duties imposed in their upstream counterparts. And the answer is yes.
Controlling for other factors, the downstream productions are deteriorated by the duties
imposed on upstream products. This is due to higher prices of their intermediate inputs.
This is not yet the end of the story. There are also consumers of the downstream
industries out there.
This issue may not be serious if most dumped imports are not intermediate but
final ones. Alas, looking at the WTO database, the two industries most involved with
antidumping activities are steel and chemical. One can easily imagine how large the
effect of antidumping measure would be.
The burden of antidumping measure seems to benefit no one but the domestic
producers whose foreign rivals face an antidumping action. To evaluate if antidumping is
an appropriate policy or not, 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. Both common sense and formal estimation say no. Douglas Irwin, an economics
professor at Dartmouth, argues that antidumping is only second the Multifibre
Arrangement as the most costly of all US import restrictions. Worse than that,
33
antidumping measures can paradoxically hurt the domestic producers themselves. This is
due to trade diversion effect.
As antidumping is selective, while the dumping firms sell less in the domestic
country, exporters from other countries may find an opportunity to compete in the market
more aggressively. The evidence supports this argument quite well. A number of papers
consider the two heavy users of antidumping measures, the US and the EU, and find
strong trade diversion effect. In the US, the increase in imports from non-dumping
countries tends to be larger than the fall in those from the dumping ones. In the EU, this
type of effect is weaker; however, it is still strong enough to cast doubt whether the EU
producers really benefit from antidumping practices.
------------------------
Article # 09 :-
'China's development benefits US economy'

Xinhua
Published Date: 28-08-2005
In this article the person is interviewed named Xinhua, he said that china‟s
economy development will be benefited for the U.S. economy. China and U.S. are two
engines of the world economic growth. China‟s development will have numerous
beneficial effects on U.S. economy. But in case of anti-dumping laws the competition
will vanished out and the growth will not effect the efficiency and productivity.
By the Grimson, who has been working in anti-dumping field, there are some
reasons by these reasons U.S. economy will get benefit that are as follows:
Chinese products are low priced so the people of U.S. can buy easily. By this the
living standard of people will enhance with controlling inflation rate.
If Chinese economy will develop than the American goods and services demand
will also increase in China.
34
If China as a manufacturing superpower will push up, the U.S. businesses will
improve their productivity and efficiency in the competition environment.
He also said that it is not right for U.S. manufacturing bodies to blame Chinese
manufacturing bodies in U.S. manufacturing jobs.
According to the statistics U.S. manufacturing sector share of the U.S. economy
has fallen from 32 percent in 1960to 22 percent in 1980 and 14 percent in 2002.
By Grimson the decline in the U.S. manufacturing jobs is before the emerging of
china as a trade power.
He also explains that less than half of the U.S. trade in 2004 is related to trade
with East Asian countries including China. The trade deficit with rest of the world is
three times more as with china over the pas ten years.
It is essential for two countries (here U.S. and china) to handle trade dispute in an
objective, transparent fashion, abiding by fundamental principles of fairness in addition
to only the direct letter of international and domestic law. And unilateral action is not the
ideal way to solve the problem. By him the Chinese economy growth is unprecedented.
China is progressing very rapidly in past several years. 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.
35
CHAPTER 03
RESEARCH DESIGN
36
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. It will represent the various aspects of our research design.
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. The questionnaire contained
questions related to the effects of dumping on economy”. We were able to collect
sufficient information with the help of these questionnaires. These questionnaires were
developed on the basis of our understanding which we developed by reviewing the
literature from different books and internet. The articles reviewed and related studies
developed by different authors were of a great help while conducting this research.
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
conditions or details and significant relationship between current phenomena. It describes

and interprets prevailing conditions of the relationship that exist or do not, beliefs or
point of views that are going otherwise, effects are being felled, or trends that are
developing “.
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. We randomly selected ten (10) economics experts in
these institutions and they filled the questionnaires. 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. It also
makes it easy to understand the questionnaire on the part of respondents. We have used 5-
points 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. The numbers assigned does not show weights. People selected
the options according to their choices. The difference between any two points on the
scale remains the same.
38
CHAPTER 04
PRESENTATION,
INTERPRETATION,
AND ANALYSIS
OF DATA
39
-: 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. These numbers does not represent the
weights. All options are of equal importance and weights.
Strongly Disagree 1
Disagree 2
Indifferent 3
Agree 4
Strongly Agree 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.
1- Ceiling of the value:
If fraction value of mean is equal or above “.5” then the mean value will
be ceiled into the next absolute number.
2- Flooring of the value:
If fraction value of less “.5” then the mean value will be floored into the
previous absolute number.
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
Tabulation and Interpretation of Data:

Frequency Distribution of the data according to respondents view about “effects of
Dumping on economy” (Q # 1).
-: Table 4.01 :-
Responses (x) Frequency (f) f*x Percentage
1 0 0 0
2 0 0 0
3 0 0 0
4 8 32 80%
5 2 10 20%
Total ∑f = 10 ∑fx = 42 100%
Calculated Mean (µ) Value:

µ = 4.2
Interpretation:
Table 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”.
The trend observed from mean (µ) calculation shows that most of the respondents agree
that the “Dumping” affect the economy.
---------------------------------------
Frequency Distribution of the data according to respondents view about “increasing free
trade gives rise to Dumping”.
-: Table 4.02 :-
1 0 0 0
2 1 2 10%
3 0 0 0
4 9 36 90%
5 0 0 0
Total ∑ f = 10 ∑ fx = 38 100%
41

µ = 3.8
Interpretation:
represents “Agree” and 10% (1) has selected option 2 that represents “Disagree”. The
trend observed from mean (µ) calculation shows that most of the respondents agree that
the increasing free trade gives rise to “Dumping” practices.
---------------------------------------
Frequency Distribution of the data according to respondents view about “the dumping
limits the international trade”
-: Table 4.03 :-
1 0 0 0
2 3 6 30%
3 1 3 10%
4 6 24 60%
5 0 0 0
Total ∑f = 10 ∑fx = 33 100%

µ = 3.3
Interpretation:
represents “Disagree”, 10% (1) has selected option 3 that represents “Indifferent”, and
60% (6) has selected option 4 that represents “Agree”. 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.
---------------------------------------
42
Frequency Distribution of the data according to respondents view about “dumping is

possible with-out natural recourses”.
-: Table 4.04 :-
1 0 0 0
2 6 12 60%
3 3 9 30%
4 1 4 10%
5 0 0 0
Total ∑f = 10 ∑fx = 25 100%

µ = 2.5
Interpretation:
represents “Disagree”, 30% (3) has selected option 3 that represents “Indifferent”, and
calculation shows that most of the responses are Indifferent which shows they neither
agree nor disagree.
---------------------------------------
Frequency Distribution of the data according to respondents view about “subsidies by
government supports dumping”
-: Table 4.05 :-
1 0 0 0
2 1 2 10%
3 2 6 20%
4 7 28 70%
5 0 0 0
Total ∑f = 10 ∑fx = 36 100%
43

µ = 3.6
Interpretation:
represents “Disagree”, 20% (2) has selected option 3 that represent “Indifferent”, and
calculation shows that most of the respondents agree that subsidies support the
“Dumping” practices.
---------------------------------------
Frequency Distribution of the data according to respondents view about “dumping harm
the domestic industry”
-: Table 4.06 :-
1 0 0 0
2 0 0 0
3 0 0 0
4 6 24 60%
5 4 20 40%
Total ∑f = 10 ∑fx = 44 100%

µ = 4.4
Interpretation:
Table 4.06 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”. The trend
observed from mean (µ) calculation shows that most of the respondents agree that the
“Dumping” harm the domestic industry.
---------------------------------------
44
Frequency Distribution of the data according to respondents view about “domestic

industry cartels support dumping”
-: Table 4.07 :-
1 1 1 10%
2 2 4 20%
3 1 3 10%
4 6 24 60%
5 0 0 0
Total ∑f = 10 ∑fx = 32 100%
µ = 3.2
Interpretation:
represents “Strongly Disagree”, 20% (2) has selected option 2 that represent “Disagree”,
10% (1) has selected option 3 that represents “Indifferent”, and 60% (6) has selected
option 4 that represents “Agree”. 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”.
---------------------------------------
Frequency Distribution of the data according to respondents view about “dumping
increase imports”
-: Table 4.08 :-
1 0 0 0
2 1 2 10%
3 0 0 0
4 8 32 80%
5 1 5 10%
Total ∑f = 10 ∑fx = 39 100%
45

µ = 3.9
Interpretation:
represents “Disagree”, 80% (8) has selected option 4 that represents “Agree”, and 10%
(1) 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” increase
imports.
---------------------------------------
Frequency Distribution of the data according to respondents view about “dumping should
be protected”
-: Table 4.09 :-
1 0 0 0
2 3 6 30%
3 0 0 0
4 5 20 50%
5 2 10 20%
Total ∑f = 10 ∑fx = 36 100%

µ = 3.6
Interpretation:
represents “Disagree”, 50% (5) has selected option 4 that represent “Agree”, 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.
---------------------------------------
46
Frequency Distribution of the data according to respondents view about “anti-dumping

laws are a good form of protectionism”
-: Table 4.10 :-
1 0 0 0
2 0 0 0
3 1 3 10%
4 9 36 90%
5 0 0 0
Total ∑f = 10 ∑fx = 39 100%

µ = 3.9
Interpretation:
represents “Indifferent”, and 90% (9) has selected option 4 that represent “Agree”. 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.
---------------------------------------
Frequency Distribution of the data according to respondents view about “protectionists

are threatened by dumping”
-: Table 4.11 :-
1 0 0 0
2 0 0 0
3 0 0 0
4 9 36 90%
5 1 5 10%
Total ∑f = 10 ∑fx = 41 100%
47

µ = 4.1
Interpretation:
represents “Agree”, and 10% (1) has selected option 5 that represent “Strongly Agree”.
The trend observed from mean (µ) calculation shows that most of the respondents agree
that the protectionists are threatened by “Dumping”.
---------------------------------------

good for customer as well as economy”
-: Table 4.12 :-
1 1 1 10%
2 7 14 70%
3 1 3 10%
4 0 0 0
5 1 5 10%
Total ∑f = 10 ∑fx = 23 100%

µ = 2.3
Interpretation:
10% (1) has selected option 3 that represents “Indifferent”, and 10% (1) has selected
option 5 that represent “Strongly Agree”. 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.
---------------------------------------
48
Frequency Distribution of the data according to respondents view about “dumping affect
the economy negatively”
-: Table 4.13 :-
1 0 0 0
2 0 0 0
3 0 0 0
4 4 16 40%
5 6 30 60%
Total ∑f = 10 ∑fx = 46 100%

µ = 4.6
Interpretation:
represents “Agree”, and 60% (6) has selected option 5 that represent “Strongly Agree”.
The trend observed from mean (µ) calculation shows that most of the respondents
strongly agree that the “Dumping” affect the economy negatively.
---------------------------------------
Frequency Distribution of the data according to respondents view about “dumping affects
the economy positively”
-: Table 4.14 :-
1 2 2 20%
2 6 12 60%
3 2 6 20%
4 0 0 0
5 0 0 0
Total ∑f = 10 ∑fx = 20 100%
49

µ = 2.0
Interpretation:
and 20% (2) has selected option 3 that represents “Indifferent”. The trend observed from
mean (µ) calculation shows that most of the respondents disagree that the “Dumping”
affect the economy positively.
---------------------------------------

beneficial for economy as it enhance competition among domestic and foreign
producers”
-: Table 4.15 :-
1 0 0 0
2 6 12 60%
3 1 3 10%
4 3 12 30%
5 0 0 0
Total ∑f = 10 ∑fx = 27 100%

µ = 2.7
Interpretation:
represents “Disagree”, 10% (1) has selected option 3 that represent “Indifferent”, and
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.
50
CHAPTER 05
FINDING, CONCLUSIO,
AND
RECOMMENDATIONS
51
This chapter presents the summary of finding of the study as gathered from questionnaire,
the conclusions as well as the recommendations drawn out from the intensive study
conducted by the researcher.
Summary of Findings:
The study attempts to determine the effects of Dumping on economy.
According to our research we are able to find out that dumping do affect the
economy. It tells us the dumping affects the economy negatively by affecting its
different components.
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. But situation can be vice a
versa because some countries would still like to enhance their trade with other
countries.
We are able to determine that dumping can be practiced by a country whether it
has sufficient resources or not. 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.
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. They have to full fill their
costs. So if the production unit shuts down in a country it affects certain
components of the economy like the unemployment increases, the gross domestic
product decreases, the gross national product decreases, the value of the local
currency depreciates. 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
price below costs. Then they can easily dump in foreign countries at a very low
price to earn market share. This will be help full for the expansion of their
business. The destruction of industry will cause to decrease the business
expansion and domestic production. So people will hesitate to take loan and start
business so the rate of interest will also decrease.
The imports of the country increases where the goods are being dumped. The
balance of payment of that country goes into deficit as foreign payments increase
and the receipts decreases. The inflow of money decreases and the outflow of
money increases. This creates pressure on the local currency and the value of
currency decreases as compared to foreign currencies. 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 study tells us that dumping being harm full for economy should be protected.
There are different methods for protecting the economy from dumping. We can
use tariffs, quotas and antidumping laws as well. Anti dumping laws are widely
accepted forms of protection. According to this study they are a suitable form of
dumping. The protectionists are the people who are in favor of restricting
dumping and they can be government, monopolists or the industrialists in an
economy. 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 study tells us that the dumping can be useful for customers but it is always
harmful for economy. The people may get cheaper goods which can be a gift for
them but the economy has to pay the cost. 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
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.
53
Conclusion:
The study tells us that dumping obviously affects the economy. The effects of
dumping on economy are negative. Different countries around the world dump to each
others‟ markets. Dumping can originate from natural resources, cheaper factors of
production or subsidies given by the government. The domestic industry has to face the
destructive effects of dumping and so are the other components of economy like gross
domestic product, gross national product, unemployment and exchange rates. These harm
full effects of dumping can bring economy on the verge of destruction. The protection
from dumping is very important. The anti-dumping laws are being implied by the
countries to protect their economy. 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.
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.
2) The industry should be protected by the use of antidumping laws which are very
good form of protection.
3) Tariffs, quotas and taxes should also be implemented to protect the industry form
dumping.
4) WTO should make sure that lesser dumping practices should take place.
5) It should define more antidumping law that should restrict the dumping with out
harming the purpose of free trade.
6) Countries should not give the unnecessary subsidies or favors that give rise to the
dumping practices.
54
7) The government should intervene to break the cartels that are the cause of
dumping in industry so the perfect competition may take place.
8) To compete the other countries products that are low-priced and better quality,
government should force the industry to increase the efficiency and production
level.
9) The governments should explore and utilize the natural resources available in the
country and produce more efficiently and cheaply.
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.
11) The industry should be efficient enough so that the exports may increase and
imports may increase. This will not only increase the per capita income but also
save from the trade deficit.
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, gross domestic product, gross national product
and the currency value.
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, not with a competition in between local and foreign
products.
55
Survey Questionnaire
Purpose of Study:
This study is being conducted in order to determent the effects of “Dumping” on
economy.
Direction:
Please mark the appropriate box against each question.
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?
Q # 03: Do you think “Dumping” limit the International trade?
Q # 04: Do you think “Dumping” is possible with-out natural resources?
Q # 05: Do you think subsidies give by government supports “Dumping”?
Q # 06: Do you think “Dumping” harm the domestic industry?
Q # 07: Do you think domestic industry cartels support “Dumping”?
56
Q # 08: Do you think “Dumping” increase imports?
Q # 09: Do you think “Dumping” should be protected?
Q # 10: Do you think “Anti-Dumping” laws are a good form of protectionism?
Q # 11: Do you think protectionists are threatened by “Dumping”?
Q # 12: Do you think “Dumping” is good for customer as well as economy?
Q # 13: Does “Dumping” affect the economy negatively?
Q # 14: Does “Dumping” affect the economy positively?
Q # 15: Do you think “Dumping” is beneficial for economy as it enhance competition

among domestic and foreign producers?
COMSATS Institute of Information Technology

(CIIT) Lahore.
URL: www.ciit.edu.pk
57
-: 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.ciit.edu.pk (Digital Library)
www.jstor.org
www.google.com
www.yahoo.com
www.ask.com
www.en.wikipedia.org
Books:
Research Methods For Business By Uma Sekaran
International Financial Management By Jeff Medora
International Business By Charles W.L. Hill
58

Effects of Dumping on International Economies and Trade

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Effects of Dumping on International Economies and Trade

Загружено:

Авторское право:

Доступные форматы

Research Methods for Business

This Project is Dedicated

Sir Amir Rashid

CHAPTER 01: The Problem and its Background

CHAPTER 02: Review of Related Literature

CHAPTER 03: Research Design

Research Design …………………………………………………………………37

CHAPTER 04: Presentation, Analysis and Interpretation of Data

Data Presentation Specifications ………………………………………………...40

CHAPTER 05: Findings, Conclusions and Recommendation

Summery of Findings ……………………………………………………………52

THE PROBLEM AND ITs

Take the US for instance, in 2001, the US launched up to 74 anti-dumping

subjective nature. So this effect can be measured by measuring the impacts on

Statement of the problem:

A combination of independent business organizations formed to regulate

Dumping: the Beginning of the End?

• An overall reduction of the ambition of the agreement on agriculture as

• A lost opportunity to respond to legitimate demands made by West African

Is the ‘global free trade’ at risk?

Cross-border trade flows are the glue of globalization. Globalization is a

On August 3, 2005, Tokyo announced its imposition of punitive tariffs on a range

Speakers’ Corner Principles for food trade

The Dumping, not the Response, is the Issue

Dumped Foreign Steel is no Boon to American Consumers

The WTO's Broken Promise

Dumping may be related to the existence of domestic subsidy programs, but it

European milk is dumped in Central America, destroying its indigenous dairy

Dumping as a method of competition in international trade

1. he can hold the surplus stock to sell it in other season

Antidumping: A Villain in International Trade

From Sarut Wittayarungruangsri

'China's development benefits US economy'

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)

Scale use Likert scale

conditions or details and significant relationship between current phenomena. It describes

-: Data Presentation Specification :-

Rounding off the Data:

Tabulation and Interpretation of Data:

Calculated Mean (µ) Value:

Calculated Mean (µ) Value:

Calculated Mean (µ) Value:

Frequency Distribution of the data according to respondents view about “dumping is

Calculated Mean (µ) Value:

Calculated Mean (µ) Value:

Calculated Mean (µ) Value:

Frequency Distribution of the data according to respondents view about “domestic

Calculated Mean (µ) Value:

Calculated Mean (µ) Value:

Frequency Distribution of the data according to respondents view about “anti-dumping

Calculated Mean (µ) Value:

Frequency Distribution of the data according to respondents view about “protectionists

Calculated Mean (µ) Value:

Frequency Distribution of the data according to respondents view about “dumping is

Calculated Mean (µ) Value:

Calculated Mean (µ) Value:

Calculated Mean (µ) Value:

Frequency Distribution of the data according to respondents view about “dumping is

Calculated Mean (µ) Value: