Dumping – Unfair Trade Practice

Roman Serences,Dagmar Kozelova,T Kliestik

doi:10.1051/shsconf/20219206033

Roman Serences, Dagmar Kozelova + Show 1 more

Open Access

https://doi.org/10.1051/shsconf/20219206033

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Abstract

Research background:The Globalisation gradually has removed the protection that has existed to protect producers against unfair trade practices. Existence of imperfect competition within an international trade is presented by descending curve of average costs while increasing economies of scale; it often leads some producers not to adjust the price in relation to the marker. In this case, we speak about dumping.Purpose of the article:The article deals with dumping issue – an unfair trade practice analysing EU trade policy including antidumping, related Slovak legislation, price discrimination and dumping model.Methods:From a methodological point of view, the article is divided into four parts; description of trade policy, antidumping and its legislation, price discrimination and dumping model. Methods of synthesis, critical thinking and graphical analysis were used.Findings & Value added:In practice, accounting of different prices to the various consumers is called a price discrimination. The most common type of price discrimination in foreign trade is a dumping. It is a price practice when a company accounts lower price for exported goods compared to the same goods sale at home. World Trade Organization (WTO) allow counter such injury via trade defence instruments (TDIs). The EU TDIs are appropriate to tackle new challenges to international trade, because the Commission had done to modernise the EU’s basic Anti-Dumping (AD) Regulations.

Highlights

Dumping is defined as an export of goods for price lower than the production costs; or when the price of exported goods is lower than domestic price of goods; or when the price of exported goods is lower compared to the one priced to the third market
The predator prices are considered as a dumping; what is an initial justification of antidumping legislation within World Trade Organization (WTO) and within EU trade policy [2]
The Trade Policy Committee (TPC) is an advisory body of the Council of the European Union and is responsible for multilateral trade matters related to application of the WTO rules and preparation of negotiation positions towards third countries not belonging to the European Union

Summary

Introduction

Dumping is defined as an export of goods for price lower than the production costs; or when the price of exported goods is lower than domestic price of goods; or when the price of exported goods is lower compared to the one priced to the third market. Most of the price discrimination forms are considered as a dumping. Any price discrimination is a dumping, except the situation when the domestic price is the lowest one and all the export prices are in the same level [1]. Price discrimination is a common trade practise. In 1920, Arthur Pigou defined three levels of price discrimination. First model, used by Dupuit: a company charges each customer with a price that is equal to the customer’s maximal willingness to pay for. The predator prices are considered as a dumping; what is an initial justification of antidumping legislation within WTO and within EU trade policy [2]

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Conclusion