Under the international laws, dumping is condemned but not prohibited. The European Union has formulated anti dumping laws to fight dumping. The general agreement on tariffs and Trade of was completely in cooperated in European Union law. This agreement contains the anti dumping rules that include calculation of dumping, the procedure involved in all investigations on dumping issues, the different measures to be imposed upon dumping as well as review and duration of anti-dumping measures.
An act is formulated, The Council Regulation EC of November to protect countries which do not belong to this union from dumping in their exports to the European Union. The act clearly distinguishes dumping from low price sales so as to avoid a situation where commodities fetch low prices, and the exporters ignorantly label this as dumping.
To avoid such situation, the criterion used is not pegged on the relationship between the price of the commodity in the country of import, but the relationship between the value of the product and its price.
In this case, a commodity is labeled dumped only under conditions where the export price to the EU is less than the comparable price of a similar product which has been established during the trade with the exporting country.
In this regard, the value which is considered in determining if dumping exists is pegged on payable or paid price, within the trading period, by customers in the exporter country.
The price may also be established based on prices of other sellers. If a case exist where the exporter in the exporting county does not sell a like product nor produce it. To further curb dumping, if the import is from non- market economy countries, the price in a market economy third country is used in determining the normal value. All these measures are put in place to avoid a situation where the actual price of the commodity cannot be established. The dumping margin is the difference between the normal value and the export price.
This is done by comparing sales which were made nearly on the same day and those that are on the same commercial stage. Adjustments are then made to account for the difference in taxation, sale conditions and any other difference that may affect the comparability of these prices.
Investigations on dumping are per foamed by a commission together with the European countries. There is an established investigation period; where different methods of data collection such as questionnaires are used to gain information from the involved parties. The committee may also use other methods as meeting to address the situation with all the involved parties. These meetings then come up with the measures. If it is established that dumping exist, the council may impose anti- dumping duty.
Since , EU has played its part in dumping policy. However, this was meant as an anti-dumping policy to protect its citizens from dumping practices.
Using its CAP policy, it has protected its member state citizens from selling their products at low prices. However, they end up selling the same products at lower prices in international markets. The initial objective of CAP as aforementioned was to increase agricultural production and enhance the living standards of the EU farmers.
This gave the European farmers and guaranteed price for their agricultural products. There was an anti-dumping price for agricultural products in the EU markets.
In addition, they ensured that European exports could be sold to international markets at prices that are slightly below the local markets without having detrimental effects on the European producers.
This policy distorted world agricultural trade because consumers preferred cheaper, yet same quality products from the US than those expensive locally manufactured ones. The EU was accused of dumping and the policy underwent severe criticism in Since then, the policy has concentrated mouth on direct payment of farmers and not market intervention.
The EU has been given the mandate to investigate dumping allegations by producers from non-EU countries. However, EU can start investigation out of its own speculation. Such proceedings take less than fifteen months to be processed. If the producer is found guilty of dumping, anti-dumping measures are imposed immediately. The non-EU producer is sectioned and the import tender is terminated. Anti-dumping measures are imposed under various circumstances within the EU.
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