Dumping means an exporter sells his product in overseas market at a very low price. It is an international trade practice where an exporter sells his product in the export market at a lower price compared to the price he is charging in the home country markets. According to the WTO, dumping is “a situation where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country.” But in international trade, dumping is considered as a negative trade policy instrument where the exporter tries to sell more in a particular market by practicing a price war. A regular low priced export is not often termed as hurting for the importing country’s domestic industry.
Dumping and antidumping procedures under WTO
As mentioned, antidumping duty is one of the frequently used trade restriction measure in the history of WTO. The trade body allows members to impose antidumping duty when dumping causes injury to the domestic industry. Under Article VI of GATT 1994, members are explicitly authorized to impose specific anti-dumping duty on imports from a particular source, in excess of bound rates, when dumping causes or threatens injury to a domestic industry, or materially retards the establishment of a domestic industry.
The Anti-Dumping Agreement provides further elaboration on the basic principles to govern the investigation, determination, and application, of anti-dumping duties
