Anti-Competitive Effects of "Anti-Dumping" rules
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The Commerce Department's International Trade Administration supposedly
acts as a "gatekeeper" for anti-dumping actions by looking at
initial claims and dismissing spurious petitions. Critics say it finds
few anti-dumping claims it doesn't like.
- From 1980 to 1997, the agency found foreign firms guilty of dumping
96 percent of the time in the cases it considered.
- The ITA is also charged with "helping U.S. businesses compete
in the global marketplace," meaning that the agency charged with
investigating dumping claims is also the advocate for people making the
claims at the outset.
- Moreover, the ITA is directed by law to disregard some high-priced
sales in the U.S. when calculating the dumping margin -- the percentage
difference between an average "fair value" and actual individual
sales -- and experts say this virtually guarantees a finding of dumping.
Anti-dumping duties levied on supercomputers made in Japan as a result
of ITA actions are hurting potential American purchasers of the machines
and thwarting competition, critics charge.
- For example, when the University Corporation for Atmospheric Research,
a federally-funded agency, sought to buy a weather simulator from a Japanese
firm, an American firm -- Silicon Graphic's Cray Research unit -- cried
foul.
- It reportedly enlisted support on Capitol Hill to pressure the Commerce
Department into claiming that the transaction constituted dumping.
- Commerce's ITA promptly complied -- determining, on the basis of information
supplied by Cray, that the Japanese firm had priced its bid more than 80
percent below market cost.
- So an anti-dumping tax of 454 percent was levied, thereby killing the
sale.
Since the computer in this case was being purchased by a U.S.-taxpayer-supported
agency, denial of the purchase of the cheaper Japanese computer hits all
American taxpayers in the pocketbook, critics point out.
Source: Christopher M. Dumler (Cato Institute author), "New Dumping
Rules Hurt Competition," Investor's Business Daily, October
7, 1997.
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