Antidumping Measures and Quality Reversals: Impacts on Intra-Industry Trade and Market Dynamics
- YourLawArticle
- Jun 4
- 1 min read
Written by: Gyanesh Kumar, B.A.LL.B (Hons.), Galgotias University
Abstract
This paper examines the implications of dumping practices by firms from developed countries (DCs) and less developed countries (LDCs) on national and global welfare. Using a theoretical framework of vertical product differentiation and monopolistic competition, the study analyses how product quality and price competition affect trade within free trade agreements. It finds that DC firms achieve higher product quality due to greater R&D investment, while LDC firms often resort to dumping low-quality goods at below-market prices to enter foreign markets.
The research asserts that optimal anti-dumping duties can enhance national welfare by protecting local industries. For LDCs, price commitments may be more beneficial than dumping, improving international relations and stabilising economies. The paper argues that without robust trade policies, the adverse effects of dumping cannot be effectively managed. Ultimately, it emphasises the need to control dumping practices to promote fair competition and sustainable development in international trade, enhancing welfare at both domestic and global levels.
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