What is dumping? Dumping occurs when an exporter exports its products into an export market at an export price that is less than it sells the same or similar product in its domestic market. In other words, it discriminates in its pricing between its export markets and its domestic markets.
Is this unlawful or illegal under WTO rules or otherwise. No.
However, the WTO rules provide that this practice is to be “condemned” it causes material injury to a domestic injury producing like goods in the importing country. In such circumstances, antidumping duties may be imposed to offset the injury to the extent being so caused.
This is usually justified on the notion that such “international price discrimination” constitutes “unfair trade”. But is it? One needs to look at the issue from different angles.
For example, price discrimination was removed from the Trade Practices Act 1974 in the 1990s. Accordingly, a domestic manufacturer, or any other domestic industry, may engage in price discrimination between its customers wherever located in Australia and for whatever reason. This is “fair trade” regardless of its effects.
So what is the difference between “international price discrimination” and “domestic price discrimination”? Why is one “unfair trade” and the other “fair trade”. Is it simply the effect that international price discrimination may have on local industries but ignore the effect that domestic price discrimination may have on local industries, exporters, importers and the Australian economy as a whole?
Domestic price discrimination may cause material injury to end-users of the producer engaging in domestic price discrimination and ultimately to consumers and to the Australian economy. Is that “fair trade”? If so, why?
Further, domestic price discrimination may cause injury to exporters and importers of like products by precluding or restricting access to the Australian market? Is that fair trade? Similarly, it may impact on the Australian economy by affecting local industries, employment and, ultimately, the Australian economy. Is this “fair trade”
Finally, why is it that government officials are the arbiters of what constitutes “fair or unfair” trade in an open market when manufactures should be at liberty to set their own prices in their own commercial interest? Is that not the purpose of an open market or am I missing something?
It would see that in advocating a “level playing field”, one needs to determine whether a “level playing field” can actually exist, either domestically and/or internationally. I think not.
Should there be appropriate remedies in such circumstances in the interests of "fair trade"?