Meaning of Dumping

What is Dumping:

It is known as dumping to the English word that derives from the term "To dump" which in Spanish means “download” or “pour”.

As such, dumping is a term used in the commercial sector, especially in international trade, which refers to the practice of placing low-cost products on the market with the objective of eliminating competition, acquiring foreign currency, and sometimes with some political purpose.

Specifically, dumping consists of a company selling its products in the foreign market at extremely low prices, and even many times lower than the cost of production. Sometimes the State grants subsidies and bonuses to exporting companies.

Dumping can be seen as a strategy established for a certain time, since once competition is eliminated from the market, the prices of the product rise, creating a monopoly.

Dumping is an unfair practice, and prohibited in commercial terms, which is why all international agreements establish repression measures, or the condemnation of said practice.

Finally, the World Trade Organization (WTO) indicates that "dumping is reprehensible (but not prohibited) when it causes or threatens to cause material injury to a domestic industry in the importing country."

Types of dumping

  • Sporadic dumping occurs due to the existence of surpluses in the production of a domestic market, so the producer diverts those surpluses to the foreign market, at low cost.
  • Predatory dumping, consists of the sale of a product at low cost, generating a loss for the producer, but obtaining other advantages such as access to the market, and excluding competition, once achieved the prices increase
  • Persistent dumping is based on the search for maximum profit from a monopolist who realizes the segmentation between the national and international markets, selling in the market at a high price with an elastic demand.

Dumping and antidumping

Anti-dumping are all the protection measures taken by the importing countries towards the exporting countries that establish low prices for their products in relation to the prices that circulate in the market, and to the price of their country of origin.

Anti-dumping arises with the purpose of protecting national production, and for this the injured State or individual must file a complaint based on reliable facts and demonstrate the existence of dumping, or damage or possible damage to the country's productive sector. , before the pertinent authorities.

Social dumping

Social dumping is a practice of certain companies that seek to increase their profits, establishing themselves in other countries where wages are lower and the rights of workers are precarious. In this way, companies manage to place their products on the international market with highly competitive prices.

Environmental dumping

Environmental or ecological dumping, consists of the establishment of the company in countries where the law does not require the taking of measures for the defense of the environment, which allows a reduction in the price of the products. This is because the technological means that must be implemented to care for the environment require a strong investment in companies.

Dumping syndrome

Dumping syndrome is one of the causes of gastric surgeries, alteration of the pyloric sphincter mechanism, among others. The syndrome is characterized by gastrointestinal and motor symptoms, presenting two clinical pictures:

  • Early dumping syndrome occurs within 30 minutes of consuming foods with high sugar or starch content, presenting the individual with weakness, fainting, asthenia, paleness, palpitations, sweating, colic and diarrhea.
  • Late dumping syndrome is characterized by vasomotor episodes that occur between 2 - 4 hours after ingestion of food. The patient has tachycardia, syncope, and diaphoresis.

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