By Brink Lindsey
Almost immediately, the U.S. stands on my own in opposing significant reform-an untenable place. during this booklet, the authors clarify how those insidious principles have persisted, and why and the way to advertise a profitable antidumping reform process.
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Additional info for Antidumping Exposed: The Devilish Details of Unfair Trade Law
In other words, there is insufficient publicly available information to distinguish between the ‘‘signal’’ of international price differences and the ‘‘noise’’ of dumping margins generated by methodologies that do not detect price differences. There are good grounds for assuming that the ‘‘noise’’ is considerable. Mixing methodologies tends to increase dumping margins 26 Rhetoric versus Reality above what would be found if only normal price-to-price comparisons were made. S. sales to only above-cost sales always exaggerates dumping margins, since all the lowest-price sales are excluded from the comparison.
Sales below Cost and Market Distortions Just as price discrimination can reflect the existence of market distortions, so can below-cost pricing be associated with ‘‘abnormal’’ market behavior. First, sales below marginal cost generally do not make commercial sense. While sales above marginal cost (but below full unit cost) at least make some contribution to recovering sunk costs, sales below marginal cost only compound total losses and therefore are almost always to be avoided. Likewise, firms cannot normally sell below full unit costs for a protracted period of time.
38 Selling below full unit costs may also make sense in the case of so-called coproducts or joint products—two or more different goods that are produced simultaneously in the same manufacturing process. Examples include different cuts of meat from the same animal, different ores extracted in the same mining operation, different chemicals produced by the same reaction, and products of varying quality produced in the same manufacturing batch. For those types of products, some allocation of shared manufacturing costs among the various joint products is necessary for cost-accounting purposes.