What is price dumping?
Price dumping means the demonstrable undercutting of prices or the sale of goods at lowest prices.
Goods are sold below their value, which in concrete terms means that the price is below the production costs and therefore cannot cover them. That is because then it is also below the normal domestic price. As a result, companies can increase their sales for a short time, but they can increase their expenses Unable to cover. Price dumping is used, for example, to facilitate market entry or to increase cash flow in the short term.
There are various subspecies from price dumping such as Social or environmental dumping, which occurs because the price must cover fewer costs for environmental regulations and wages or social security contributions. In addition, there is the Valutadumping or Exchange rate dumpingwhen the exporting country systematically devalues the currency. Or even that Freight dumpingwhen freight rates are below cost.
At Agricultural dumping enable export subsidies a low price level, although prohibition regulations do not apply. The problem is that, particularly in developing countries, low import prices for Loss of the domestic sales market worry. There is also criticism that exporting countries are thus supporting mass rather than quality.
How do you determine price dumping?
The comparable price of an equivalent product is used as normal value for the calculation. For a anti-dumping measure A review procedure is preceded, for which the dumping margin and the damage margin are calculated.
Die dumping margin Is the percentage that you have to add so that the export price is on the normal value Would level off. Die Margin of damage In turn, give the percentage that you would have to add so that a company has an appropriate profit margin could achieve.
Why is it forbidden?
Price dumping occurs primarily in exportation in appearance, which is to be increased. Importing similar goods is therefore cheaper than buying goods from your own country. Globales Price-Dumping is prohibited, as competitive pressure in the importing country can increase significantly.
That can be done with a Anti-dumping duty counteracted become. For this, there has been since 1994 That GATT, that General Agreement on Tariffs and Trade or General Agreement on Tariffs and Trade, with an anti-dumping paragraph that treats dumping as a falsification of competition. The agreement was introduced by WTO, which dumping as a protectionist measure ostracizes because it promotes exports.
