What is dumping? Dumping occurs when foreign companies dump products on the European market at artificially low prices. This could be due to the fact that countries unfairly subsidize products or have overproduced companies and now sell the products at discounted prices in other markets. Why is this a bad thing? Dumping is a form of unfair competition because products are sold at a price that does not accurately reflect their costs. It is very difficult for European companies to compete with it and, in the worst case, this can lead to the closure of companies and the loss of workers` jobs. What is the EU doing to combat this? The EU has a number of trade defence instruments to combat unfair trading practices, including anti-dumping rules. One way to combat dumping is to impose anti-dumping duties on these products. To find out more about how it works, see our article on the EU`s anti-dumping policy. The Agreement provides that, in assessing the impact of the dumped imports on the domestic industry, the authorities will assess all relevant economic factors affecting the state of the domestic industry. The agreement sets out a number of factors to be taken into account, including actual or potential declines in sales, profits, production, market share, productivity, return on investment, capacity utilisation, actual or potential impact on cash flow, inventories, employment, wages, growth, the ability to raise capital or investment and the magnitude of the dumping margin. However, the list is not exhaustive and other factors may be considered relevant.

In addition, the agreement again stipulates that no factor or combination of factors necessarily leads to an affirmative or negative determination. Most countries are members of the WTO. Member States shall respect the principles laid down in the negotiations on the General Agreement on Tariffs and Trade. It was a multilateral trade agreement that preceded the WTO. Countries agree that they will not dump or impose tariffs on any industry or country. To impose an anti-dumping duty, WTO Members must demonstrate dumping. Dumped products pose a threat to European businesses and workers, but do you know how they work? Find out in our Quick Guide to Dumping. As stated in the investigation initiation test, EU anti-dumping measures are mainly considered to be part of a “trade defence” portfolio.

Consumer interests and non-sectoral interests (`Community interests`) are not identified in the course of an investigation. An investigation normally examines the injury caused to the Community producers by dumping and the amount of duties imposed is based on the injury suffered by the Community producers as a result of dumping. You must also prove that the dumped price is much lower than the exporter`s domestic price. The country in dispute should also set the normal price before the entry into force of the anti-dumping duty. The European Union`s common agricultural policy has often been accused of dumping, despite important reforms under the Agreement on Agriculture during the GATT Uruguay Round negotiations in 1992 and subsequent progressive reforms, in particular the Luxembourg Agreement in 2003. Initially, the CAP aimed to increase European agricultural production and support European farmers through a market intervention process in which a special fund, the European Agricultural Guidance and Guarantee Fund, would buy surplus agricultural products if the price fell below the centrally determined intervention level. Article 5 of the Agreement lays down the conditions for the initiation of investigations. The Agreement stipulates that investigations must generally be initiated on the basis of a written complaint filed by or on behalf of a domestic industry. This ongoing requirement includes numerical limits to determine whether domestic producers receive sufficient support to conclude that the complaint is filed by or on behalf of the domestic industry and thus justifies initiation.

The Agreement establishes requirements for proof of dumping, injury and causation, as well as other information on the product, industry, importers, exporters and other matters, in written requests for anti-dumping exemptions and provides that, in special circumstances, where they object without a written request from a domestic industry, the authorities act only if they have sufficient evidence of the existence of dumping, injury and causation. In order to ensure the continuation of unfounded investigations which may disturb legitimate trade, Article 5(8) provides for the immediate termination of investigations in cases where the volume of imports is negligible or the dumping margin is de minimis and sets numerical thresholds for those findings. In order to minimise the disruptive effects of investigations, Article 5(10) provides that investigations must be concluded within one year and in no case more than 18 months after initiation. The EC must impose two other conditions before imposing tariffs. First, it must establish that dumping is the cause of material injury. Secondly, it must affirm that sanctions do not violate the best interests of the EU as a whole. Unlike sporadic spills, which occur occasionally, predatory spills are permanent. This is the sale of goods on a foreign market at a lower price than the domestic market. Predatory dumping is carried out in order to access the foreign market and eliminate competition. It creates a monopolyMonopolyA monopoly is a market with a single seller (called the monopolist), but with many buyers. In a perfectly competitive market that includes in the market. Trade agreements do not prevent dumping with countries outside the treaties.

Second, countries take more extreme measures. Anti-dumping duties eliminate the main benefit of dumping. A country may impose an additional duty or tax on the importation of goods that it considers to be dumped. The main advantage of commercial dumping is the ability to enter a market whose product prices are often considered unfair. The exporting country may offer a subsidy to the producer to compensate for losses incurred when products are sold below their cost of production. One of the biggest drawbacks of trade dumping is that over time, subsidies can become too expensive to be sustainable. In addition, trading partners who wish to restrict this form of activity in the market may increase restrictions on the product, which could lead to increased export costs to the country concerned or restrictions on the quantity a country will import. In January 2017, the International Trade Association (ITA) decided that the anti-dumping duty on silica fabrics from China would remain in effect the previous year, based on an investigation by the Department of Commerce and the International Trade Commission, which concluded that silica products from China were sold in the United States at a value below fair value. The ITA`s decision was based on the fact that there was a high probability that dumping would recur if the tariff was repealed. Detailed procedures are defined on how to initiate anti-dumping cases, how investigations are to be conducted and under what conditions it is possible to ensure that all interested parties have the opportunity to provide evidence.