DUMPING, term commonly used to describe the sale of goods for export at prices lower than those charged at the same time and under like circumstances to buyers in the country of manufacture. Anti-dumping legislation exists in the United States, Canada, Australia, New Zealand, the Union of South Africa, and Great Britain. In the United States, Australia and the Union of South Africa dumping is held to exist when the importation of the dumped goods is likely to result in injury to an industry within the territory concerned.
In Great Britain the anti-dumping duty is chargeable subject to the following conditions: (a) That goods are being imported at a price below the cost of production. Cost of production within the meaning of the act is 95% of the wholesale price charged at the works for consumption in the country of manufacture, subject to the deduction of any excise or similar taxes; (b) That similar goods can be profitably manufactured in the United Kingdom (not merely in Great Britain) ; (c) That by importation under (a) employment in any industry in the United Kingdom is being or is likely to be seriously af fected; (d) That the affected home industry is being carried on with reasonable efficiency and economy ; (e) That the finishing industry which uses the goods in ques tion as material is not too hard hit by a dumping duty (the Act provides that a committee shall make a special report on the subject, to be referred for "consideration" by the board of trade); (f) That no dumping duty shall be levied which is at variance with any treaty with a foreign State.
According to a memorandum prepared by Prof. Jacob Viner for the economic and financial section of the League of Nations, "Dumping is likely to prevail as a systematic practice only if : "(a) The exporting industry is trustified or syndicated; or "(b) The industry, though not organized into a single unit for production or export, is dominated by one or two large concerns, each of which controls a sufficient proportion of the total output to warrant its assumption of a disproportionate part of the burden of accepting export orders at less than the prevailing domestic rates; or "(c) The product is not standardized as between different pro ducers, so that each producer can individualize his product by trade-mark, brand, pattern, type of container or otherwise, and so escape the full pressure of price competition; or "(d) An export bounty is granted by some agency external to the industry, such as the State, or another industry supplying the materials which the industry under consideration works up into a more finished product." Prof. Viner also holds that protective import duties in the ex porting country facilitate dumping.
According to the final report of the Committee on Commercial and Industrial Policy After the War (cd. 9035) 1918, the recom mendations of which led to the act of 1921, "the view is strongly held that the frequent dumping of any particular class of foreign goods produces a feeling of insecurity in the corresponding in dustry of this country which diminishes the incentive to develop ment, and that in certain cases the dumping by foreign combina tions has been the expression of a persistent policy aiming at the depression of some British industries and the prevention of the establishment of others. It is, of course, impossible in every case to prove the truth of this latter suggestion; but we see no reason to doubt that there is at least a prima facie ground in support of it." The value of dumping to the dumping industry is held to lie in the fact that it enables it to maintain a high level of output, thus keeping works at or near full production and reducing the incidence of overhead charges. (C. TE.)