June 26, 2006
When N.C. State University's Mike Walden mentions "dumping," he's not talking about taking your trash to the garbage dump. He's referring to the dumping, or selling of internationally traded goods, at prices below costs.
"That’s what it means to dump your products in other countries; it means you sell for less than your costs. That is, you are actually selling at a loss," explains Dr. Walden, a professor in the Department of Agricultural and Resource Economics.
"Now why would a country do that? Well, they might do that, it’s alleged, to drive out domestic producers and therefore increase their market share and then later they can increase their price," he explains.
"Now we often have every year claims that country A or country B is dumping their products in another country. And there is actually a mechanism -- international mechanisms -– for countries who are charging another country of dumping to fill a suit, file a grievance," he adds.
"Dumping, however, is very, very hard to prove because production costs vary so much between … countries. Dumping has been a sore spot here in the U.S. for furniture manufacturers, for example, who have charged that some low-priced foreign competitors are dumping here," Walden says. "But what we have seen, however, is dumping complaints decline recently as the economy has improved."
Posted by deeshore at June 26, 2006 08:15 AM