1 / 5

Ch 6 – NTB’s

Ch 6 – NTB’s. Anti – Dumping Legislation Dumping Form of international price discrimination Foreign buyers are charged lower prices than domestic buyers for same goods. Selling in foreign markets for price below production costs. Forms of Dumping Sporadic (Distress Dumping)

colorado-alexander
Download Presentation

Ch 6 – NTB’s

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Ch 6 – NTB’s • Anti – Dumping Legislation • Dumping • Form of international price discrimination • Foreign buyers are charged lower prices than domestic buyers for same goods. • Selling in foreign markets for price below production costs. Forms of Dumping • Sporadic (Distress Dumping) • Poor planning or supply/demand shocks can cause excess inventories. • Firms dump excess in foreign markets at lower price than at home. • Good for importing consumers, maybe bad for import-competing industries. • Small impact, usually not fought with tariffs.

  2. Ch 6 – NTB’s • Anti – Dumping Legislation • Dumping • Form of international price discrimination • Foreign buyers are charged lower prices than domestic buyers for same goods. • Selling in foreign markets for price below production costs. Forms of Dumping • Predatory • Price temporarily lowered to drive competitors out. • Same concept as predatory pricing. • Prices are then raised after firm gains market power. • Nations may respond with anti-dumping duties to eliminate price differences. • Little or no empirical evidence found to support it’s existence.

  3. Ch 6 – NTB’s • Anti – Dumping Legislation • Dumping • Form of international price discrimination • Foreign buyers are charged lower prices than domestic buyers for same goods. • Selling in foreign markets for price below production costs. Forms of Dumping • Persistent • Goes on indefinitely • Same rationale as price discrimination. • Uses different elasticities of demand to sell to different consumer groups at different prices. • US anti-dumping laws are used to eliminate price discrimination that injures US industries. • Anti-dumping duties will be imposed if Dept. of Commerce determines good is being sold at Less Than Fair Value (LTFV), and is causing damage.

  4. Ch 6 – NTB’s • Government Procurement Policies • or • “Buying American” Buy American Act, 1933 • Government purchases are to be made from domestic suppliers if the price is not “unreasonably” high. • Stipulations: • Must be “domestic”, usually at least 50% domestic component. • 6% Preference margin – US bid cannot be more than 6% higher than foreign bid. • Labor surplus area – 12% • Dept of Defense purchase – 50%

  5. Ch 6 – NTB’s • Government Procurement Policies • or • “Buying American” Buy American Act, 1933 • Government purchases are to be made from domestic suppliers if the price is not “unreasonably” high. • Results: • Barrier to free trade. • Leads domestic suppliers to be inefficient. • Leads to higher costs for government projects. • Deadweight welfare loss in protective and consumption effect.

More Related