What does the term dumping mean in the economy?
One of the economic terms that has a special place in international trade is dumping, which in Farsi means “insidious competition” or price discrimination in foreign trade. Some experts have also called the Persian equivalent of this word destructive competition. In the common term, dumping is used to mean price breaking, and it means; The goods enter the country at a price lower than its normal value.
For example, if it can be said that a commodity has entered the country’s trade flow with a price lower than its normal value, the price of this commodity when it is exported from a country to Iran:
1. In the ordinary course of trade, it is lower than the comparable price for similar goods that are considered for consumption in the exporting country.
2. In the absence of such domestic price, it is lower than the highest comparable price for similar goods for export to any third country in the normal course of trade, or lower than the cost of producing these goods in the country of origin plus a reasonable amount for administrative costs. sales and general expenses as well as profit.
Dumping, which means selling goods at a price lower than the cost of production in world markets, is one of the policies that have many destructive and harmful effects on the economy of farmers in developing countries, especially in poor countries.
According to this policy, rich countries rely on a strong financial base and in the conditions that, due to the lack of comparative advantages, produce their goods at a much higher cost than competing developing countries, a kind of artificial competitive power to the goods. They produce their own data and send it to the world markets, which deprives the competition of similar goods produced in the rival country and will not lead to anything other than leaving the field in favor of rich countries.
The importance of the issue doubles when dumping (price cutting) is often applied to goods that are the main source of income for poor countries (raw agricultural products), so it is not far from expecting that the adoption of this policy will have consequences such as endangering bring the livelihood of a large number of families in poor countries.
In response to such a destructive policy and in order to protect domestic products, the Cabinet of Ministers of the Interior, based on the proposal of the Ministry of Commerce and the favorable opinion of the member of the Economic Council, in the implementation of Section H of Article 33 of the Law of the Fourth Development Plan approved in 2013, protective, compensatory and anti-dumping measures and measures approved to support domestic producers. This resolution, which was notified by the First Vice President to the Ministries of Commerce, Economic Affairs and Finance, Foreign Affairs, Industries and Mines, Agricultural Jihad, Cooperatives and the Central Bank of the Islamic Republic of Iran, in the meeting dated 5/7/1386 according to proposal no. 24936/1 dated 24/12/1383 of the Ministry of Commerce has been approved.
Sources:
1. Research Center’s proposal for drafting anti-dumping law, Majlis Research Center’s information base.
2., dumping, price discrimination, Iran’s commercial point network.
3. Implementation of anti-dumping in the country, Target and Economy website, Target News.
4. Finally, anti-dumping was implemented in Iran, No Andishan Sanat site.
This post is written by Salehi_2