Tuesday, June 24, 2014

[Extra] Controversy in regulations on free trade


The practice of selling a product in a foreign market at a price lower than it commands in the producer's domestic market is called dumping. Critics of free trade often argue that foreign governments give substantial support to their own exporting companies. Government support may permit these firms to extend their export markets by offering lower prices abroad. In retaliation for this interference with free trade, the US adds import tariffs to products that foreign firms dump on US markets to bring their prices in line with those of domestically produced products. However, business often complain that charges of dumping must undergo a lengthy investigative and bureaucratic procedure before the government assesses import duties. US firms claiming that dumping threatens to hurt their business can file a complaint with the US International Trade Commission, which - on average - rejects about half the claims it receives.


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