Many countries, particularly the developing world, have expressed gratitude when the proper mechanisms for the launching of trade liberalization measures were put into effect. In some aspects, these measures were proven to have helped a great deal in effecting changes in the way trade barriers were addressed.
In fact, the establishment of the Uruguay Round for trade negotiations, the North American Free Trade Agreement, and the Information Technology Agreement have sharply reduced tariffs and customs duties on imports in many countries. But the issues on anti-dumping activities have begun to crop recently thereby alerting aggrieved countries to raise the problem on the proper fora.
Thomas Klitgaard and Karen Schiele, senior economist and assistant economist at the International Research Function of the Research and Market Analysis Group, wrote in their study published by Current Issues in Economics and Finance, a publication of the Federal Reserve Bank of New York, that "trade liberalization had little effect on the use of antidumping tariffs–tariffs imposed on imports judged by a government to be unfairly priced."
"Although these agreements have removed many impediments to trade, they have done little to curb the use of one type of barrier–the anti-dumping tariff," the study said.
Accordingly, the anti-dumping tariff is imposed by a government if it feels that the imports being sold are les than the fair price in the domestic markets and that the pricing of these imports harm or threaten the domestic producers of the same goods.
Worldwide, the proliferation of anti-dumping tariffs increased since the 1990s. From 193 anti-dumping orders in place, these jumped to 294 in 1997. While those from other member countries in the WTO had increased from 212 to 538, Current Issues said.
The study noted that many countries right now are resorting to the anti-dumping tariffs are a form of protection. Among the countries that now use this measure include Argentina, Brazil, India, Mexico, South Africa, and Turkey. The share of anti-dumping orders against the U.S. grew such that if the trend continues, it is highly likely that the U.S. could lose considerable business as tariffs raise the price of their goods in foreign markets, it added.
"To some observers, anti-dumping tariffs are a useful means of shielding domestic firms and worker from the unfair pricing practices of foreign firms," the study further said.
As is most commonly taking place in the open markets, some countries export a much cheaper products that are already available in the domestic markets. When this happens, the tendency is always for the domestic producers to be out of business due to unfair pricing practices imposed by the exporting countries.
The General Agreement on Tariffs and Trade was established to lower member countries tariffs on manufactured goods by more than one-third by 1999. The 1994 NAFTA immediately eliminated tariffs on half of U.S. exports to Canada and Mexico, and eventuallyt zero tariffs on goods in 2000. While the Information Technology Agreement of 1997 was meant to eliminate customs duties on computers and telecommunications equipment by the year 2000. According to the study, this agreement had roughly affected US$1 trillion in world production and US$600 billion of world trade.
Critics said that anti-dumping regulations can create the potential for abuse as domestic producers may allege that dumping by foreing rivals solely to stifle competition and to keep their own prices high, the study noted.
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