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 country’s 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.