Unfair Trade Practices

1
Unfair Trade Practices

• Foreign trade practices that cause or threaten to
  cause material injuries to domestic industries

2
Unfair Trade Practices

• Dumping
• selling a product in a foreign country at a price
  that is lower than the price charged by the same
  firm in its home market or at a price below costs
  of production.
• Export Subsidies
• using taxpayers money to give low-interest loans
  to either exporters or their foreign customers or
  make direct payments to exporters.

3
Types of Dumping

• Sporadic Dumping
• Predatory Dumping
• Cyclical Dumping
• Seasonal Dumping and
• Persistent Dumping.

4
Export Subsidies

• An export subsidy is a direct (or indirect)
  payment from a countrys government to one or
  more of its export industries. This payment is
  usually related to the level of exports, and
  thereby enables exporters to charge a price that
  is lower than would otherwise be charged. With
  lower prices, exporters are then able to gain a
  larger share of the world market.

5
Export Subsidies

• In the U.S., there are a few institutions of the
  federal government that aid the efforts of U.S.
  exporters.
• The Export-Import Bank, Eximbank, was
  established in 1945 as an independent government
  agency. The role of Eximbank is to provide
  export financing for U.S. firms that is
  competitive with that available in the major
  industrial countries. The Eximbank offers
  several different programs to meet the financing
  needs of U.S. exporters and foreign importers.
  For large purchases requiring a long period of
  repayment, direct loans are made to foreign
  importers.