World Trade Organization - The Problem of Dumping in World Trade - Essay Example

This essay states that classic economic literature defines dumping from various perspectives. One such aspect relates to the distinction of dumping according to its various types. This follows that dumping can be distinguished by the nature and intent behind it. As a consequence, predatory and non-predatory dumping done by companies comes into perspective. There can be various motivations behind dumping of goods and services. From a business point of view, dumping is a type of predatory pricing or price discrimination.

Price discrimination refers to the act of selling the same good or service at different prices. In conclusion, the researcher suggests that anti-dumping is the most used “contingency protection” of the WTO agreements today, and is used not only in transatlantic trade, but also by the United States and the EU. Dumping is defined as lowering of the prices of the imports in the foreign market. There are various classifications of dumping, i.e. predatory and non-predatory as well as reverse dumping, sporadic dumping and persistent dumping.

There is a lot of debate regarding dumping and attitudes towards it differ greatly. Dumping offers short-term benefits to the customers but on the global scale, it can be deleterious to the country where the prices of the imports have been lowered. However, the researcher states that despite the weaknesses of the current anti-dumping system, the WTO is the most effective institutional instrument for regulating international trade.