Anti-dumping duties and social dumping regulations
"Anti-dumping duties, because I'm worth it!? This could be the new slogan of the EU's anti-dumping measures. Production and distribution in Europe induced the respect of many rules. Some generated a cost and others limited the freedom of action in business competition. This is the respect for social rules. Indeed, the participation of some countries in international trade does not always mean that respect is given in the same social conditions as those required to meet European Union. The competitiveness of some products would be based, for some countries, on the low labor cost.
Similarly, the European Union, unlike many countries, strictly prohibits child labor and encourages collective bargaining. Here we discuss the concept of social dumping. It is also the concept of eco-dumping: some companies do not incorporate environmental costs in their productive activities and therefore, can offer more competitive prices. The price dumping is an unfair trade practice in terms of price, and is condemned by all national laws and the GATT. It allows a country to sell in the EU the same product at a price below the price in the domestic market, or exceptionally, at a price below its cost price. Manufacturers then reduce their prices to eliminate competition and to gain a given market, thus creating a monopolistic situation. Therefore, competition is no longer an incentive for Europe, but poses a threat.
Nothing justifies that the European market is crushed by unfair international competition, and measures should inevitably be introduced to eliminate the threat to Europe: the response was the introduction of anti-dumping duties that constitute an effective measure to restore balance and limit the effects of dumping. Since the mid-1980s, the use of anti-dumping measures was initiated due to few industrialized countries like Australia, the United States, New Zealand and the European Union. However, during the last fifteen years, a growing number of complaints were filed by developing countries. They tend to represent the same two-thirds of users of anti-dumping measures.
But over the past fifteen years a growing number of complaints have been filed by developing countries. They tend to represent the two-thirds of users of antidumping measures. India, Argentina and South Africa accounted for 39% of complaints between 1 July 2001 and June 30, 2002, against 7% for the European Union. This, coupled with trade liberalization has increased the number of anti-dumping measures on a global scale.
By December 31, 2000, 1139 anti-dumping measures were in force worldwide. The sectors most affected were base metals (39%), particularly steel, and chemicals (13%), plastics (11%), textiles (9%), and agriculture and food products (4%). As an illustration, we can meet the rising complaints of dumping in the steel sector which occurred some years ago. Indeed, global overcapacity in steel production led to lower prices, and there was an increase in steel exports in markets where domestic demand fell. Therefore, the steel markets open as those of Canada and the United States attracted a high percentage of low export prices, which led to this increase in complaints of dumping.
Tags: anti-dumping measures, trade liberalization, steel sector