Dumping

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Dumping (from English to dump , "unload"), [da ...] the, -s (plural), denotes the sale of goods or services below the production cost or cost . If the price of a good is below the manufacturing costs or the purchase price , this is also called the dumping price (sometimes also the penetration price ).

If the sale takes place outside the country of manufacture, the term refers to the prices applicable on the exporter 's home market . From the producer's point of view, such dumping makes sense if it is not possible to re-import the goods to the country of origin.

history

The problem of dumping has long been known.

As early as 1931, the Reichsgericht had to decide the Benrath gas station case . In the first half of the 20th century, the Austrian economist Gottfried Haberler dealt intensively with the term dumping .

The GATT of 1947 contains an anti-dumping paragraph in Article VI. In 1994 this article became binding for all members of the WTO with the Agreement on the Implementation of Article VI .

overview

motivation

A dumping provider always accepts a short-term economic loss in order to achieve long-term positive consequences for himself. There can be different goals for offering an asset at a dumping price:

From state-Dumping occurs when this is made possible by a state export promotion, and economic policy objectives are based. The currency policy of a state can also aim to promote exports and curb imports (see also “ Competitive devaluation ”). States that do not have a freely convertible currency can easily fix the rate of their currency.

If you want to rent out an economic good (e.g. hotel room, merchant ship, railway wagon), you have, so to speak, 'perishable goods'. If z. For example, if a hotel room threatens to remain unlet, the landlord is tempted to rent it out at a price that does not cover costs. His motivation is "better a non-cost-covering rental price than no income at all". A possible lower limit of a rational rental price is its variable costs (example hotel room: costs for roomkeeping, final cleaning, water, electricity, possibly breakfast); see also contribution margin . This temptation can lead to a price war in a market or to ruinous competition .

Differentiation and classification of dumping

At the conceptual level, dumping can be broken down into the following types:

  • seasonal,
  • sporadically,
  • cyclical,
  • persistent,
  • and predatory.

You can also look at dumping in different markets, such as agricultural dumping or wage dumping .

conditions

In order for dumping to be possible, two conditions must be met:

  1. industry-specific incomplete competition (companies have a certain influence on prices, no perfect price takers )
  2. Market segmentation (residents cannot easily buy the export goods, no arbitrage ).

Determination of dumping

Two terms are important for determining whether dumping has occurred:

  1. Dumping margin : percentage by which the export price would have to be increased in order to reach the so-called normal value.
  2. Injury margin (Engl. Injury margin ) percentage will be raised by the export price would have to allow domestic producers to cover their costs and achieve a reasonable profit margin.

These two key figures must be calculated as part of an anti-dumping procedure. They form the basis for an anti-dumping duty, which may not exceed the size of the smaller of the two numbers.

effect

In any case, dumping leads to a short-term reduction in the price of the dumped goods or services and thus to a favored group of customers to the detriment of those who carry out the dumping. Whether the intended medium- or long-term assertion of the interests of the dumping provider is successful depends on many factors, including market development, market flexibility and the behavior of the buyers. The more developed and flexible a market is organized and the greater the chances of new, non-monopolistic providers entering the market, the lower the chance that dumping will have the intended, harmful effect on the market in the long term.

Countermeasures

With the exception of agricultural dumping, dumping is prohibited under the rules of the WTO . Since the actual cost structures of a supplier are not accessible to an outside authority, for practical reasons (for example in the legal opinion of the WTO) dumping is already assumed if the observed price of an exported good in the exporting country is lower than the price in the production country. A country that is demonstrably damaged by dumping is entitled to levy an anti-dumping duty .

Derived use of the term

In a figurative sense, social dumping is sometimes used when lower social standards enable goods and services to be offered inexpensively in a third country. However, this differs from the above definition of dumping and is therefore a transfer of the negative value term into a different context .

The same applies to tax dumping . Here, individual areas of an economic area set their tax rates for companies or private individuals very low or (temporarily) completely waive taxation in order to gain a competitive advantage.

Real social dumping occurs when social standards are partially disregarded, e.g. B. in the case of undeclared work outside of working hours by full-time employees with social insurance. The favorable final price can then only be offered because the service provider does not pass on the costs of social security to undeclared work.

Often the accusation of dumping is unjustified in order to justify trade policy measures or to force foreign suppliers to voluntarily restrict themselves, for example with the Byrd Amendment .

Dumping is also often assumed, even if lower prices make sense due to comparative cost advantages .

Likewise in the figurative sense, one speaks of wage dumping when low wages are paid, especially when they are below the subsistence level or social assistance rate .

See also

literature

  • Richard Reuter: Dumping from a market economy perspective . German University Press; Edition: 1996 (July 15, 1996). ISBN 978-3824463299 .

Web links

Wiktionary: dumping  - explanations of meanings, origins of words, synonyms, translations

Individual evidence

  1. ^ Dumping - definition in the Gabler Wirtschaftslexikon.
  2. ↑ Dumping price - definition in the Gabler Wirtschaftslexikon.
  3. ↑ Gottfried Haberler: The international trade . Jumper; Edition: 1933 (January 1, 1933). ISBN 978-3642505638 , pp. 218ff.
  4. ^ The General Agreement on Tariffs and Trade (GATT 1947) - Legal Text on the pages of the WTO.
  5. ↑ Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Anti-Dumping Agreement) - Legal Text on the pages of the WTO.
  6. ^ Paul Krugman, Maurice Obstfeld, Marc Melitz: International Economy: Theory and Politics of Foreign Trade . Pearson Studies; Edition: 9th, updated edition (November 1, 2011). ISBN 978-3868941340 , p. 191.