Trade and Export Promotion Policies

Feb 3rd, 2012
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“Unfair” Trade and Export Promotion Policies » Types of dumping » What to do if your country is dumped on?

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"Unfair" Trade and Export Promotion PoliciesF Dumping and international trade Types of dumping What to do if your country is dumped on?F Export subsidies Programs beyond production subsidiesF Countervailing dutiesF Strategic trade policy Game theory on an international scaleProf. LevichC45.0001, Economics of IBChapter 10, p. 1Types of DumpingF Dumping ? international price discrimination Selling same product at different prices, at home and abroadF GATT/WTO definition Selling in the foreign market at price < price in home marketF US and alternative GATT/WTO definition Selling in the foreign market at price < "fair market value" which is often taken to mean < "normal average cost"F Dumping adjectivesSeasonal - when exporter has a bumper cropCyclical - when exporter has a slump at homePredatory - intended to eliminate competitorsPersistent - goes on and onProf. LevichC45.0001, Economics of IBChapter 10, p. 21 Seasonal Dumping - Mexican TomatoesThe Overripe Case Against Mexican Tomatoes (1980)F U.S. antidumping laws prohibit sales of importedgoods below "fair value" = cost of productionF What about tomatoes? A perishable commoditywhose price fluctuates from winter to summer. Isproduction cost relevant for sales price?F In 1980, Mexico supplied ~ 1/2 of all fresh tomatoes,cucumbers, eggplants ... in U.S. winter season.F Florida farmers object, file dumping claim. U.S.Treasury rejects claim. Florida farmers appe

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