29 Antidumping and Countervailing Duties

29 Antidumping and Countervailing Duties - Antidumping...

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1 Antidumping, Countervailing Duties • Policy Response to Foreign Dumping • Policy Response to Foreign Export Subsides Antidumping Duties Dumping occurs when a firm is exporting goods at a price that is below the price in its home market. – WTO rules allow an importing country to apply an antidumping duties (or tariffs) any time that a foreign firm is dumping its product. Antidumping Duties • The amount of the antidumping duty is equal to the discrepancy (called the dumping margin) between the exporter’s local price and the “dumped” price in the importing country. – This creates a strong incentive for the Foreign firm to raise its export price to reduce or avoid the duty. Antidumping Duties S 0 D 0 Q P P 0 D S
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2 Antidumping Duties • Antidumping policy sounds like it is about unfair exports. – However, antidumping policy has become a major way for import-competing producers to gain new protection against imports with the usual deadweight costs to the world and the importing
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This note was uploaded on 02/25/2012 for the course ECON 181 taught by Professor Kasa during the Spring '07 term at University of California, Berkeley.

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29 Antidumping and Countervailing Duties - Antidumping...

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