Dumping

Dumping is an unfair trade practice whereby products are exported at prices below their production costs. The World Trade Organization (WTO) has an Anti-Dumping Agreement, which allows its members to protect their domestic products against unfair competition from products produced in other countries. The purpose of the agreement is not to define dumping, but to specify how WTO members are to respond to it. Nevertheless, there are criticisms that the contents of the agreement are too general, and that economically powerful countries, such as the European Union (EU) and the United States can exploit loopholes to accuse other countries of dumping practises – usually targeting developing countries.

The EU and the US dump their produce and goods with large subsidies on developing countries while concurrently keeping international prices at low levels, which seriously affect the livelihoods of smallholder farmers. Still the WTO has failed to put a stop to such unfair tactics. Making or defending against allegations of dumping requires substantial input of human and financial resources, and this is often beyond the means of the developing countries. The ambiguity and abuse of allegations of dumping and anti-dumping adversely affect the interests of developing countries in international trade, a subject which must be addressed during the negotiations about the WTO agreements.

Restricted market access

Up to 128 million people will be able to lift themselves out of poverty if Africa, East Asia, South Asia and South America can respectively increase their global export market shares by one percentage point.

Rich countries impose high duties on imports from poor nations, and thereby restrict their market access. Many poor countries can only export raw materials for primary production, and the returns for these materials are far lower than those for industrial products.

For example, rich countries purchase cotton and cocoa beans at low prices, then process them into expensive goods and then reap all the profits alone.

If poorer countries do not open their domestic markets to rich countries, they may also be threatened that rich countries will not grant them loans.

Forcible opening of markets

Millions of poor farmers in developing countries cannot compete against produce dumped in their countries at low prices.

For a long time, rich countries have been urging poor countries to open their markets, through the World Bank, International Monetary Fund (IMF) and international trade agreements, partly in order to dump their subsidised produce in these markets. They are now utilising international trade agreements to eliminate all trade barriers.

Patent Rights

In order to protect the interests of their businesses, rich countries have raised the levels of protection on intellectual property rights, making developing countries suffer an extra cost of US$40 billion per annum.

Affluent and powerful multinational corporations pressure their governments into increasing their levels of protection for intellectual property rights, raising the prices of necessities such as seeds, medical textbooks, and computer software.

As a result, many people in poverty cannot afford the medicine they need: 14 million people die from curable illnesses every year. If the price of medicine was set lower, more people’s lives could be saved.