Dumping refers to the situation when a country sells exports very cheaply to another country.
For example, the European Union had a large surplus of food items, due to the Common Agricultural Policy. These goods were then sold very cheaply – ‘dumped’ on other world markets. This causes big problems for farmers in these countries because they are undercut, prices fall and they lose income. Therefore, governments are keen to take measures against the dumping of goods.
Anti Dumping Duties
This is a tariff on imports specifically placed on goods sold below market price. It is a way of increasing the price of goods which are too cheap.
Quotas
Another option is to limit the amount of a particular good which can be imported. These are also known as Voluntary Export Restraints (VER).
The problem with anti dumping measures is that there is no easy definition of what is meant by dumping; therefore countries could use anti dumping measures as an excuse to increase tariff’s generally. Anti dumping measures usually occur in response to complaints by domestic industry.
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