1. Ch 6 – NTB’s • Anti – Dumping Legislation • Dumping • Form of international price discrimination • Foreign buyers are charged lower prices than domestic buyers for same goods. • Selling in foreign markets for price below production costs. Forms of Dumping • Sporadic (Distress Dumping) • Poor planning or supply/demand shocks can cause excess inventories. • Firms dump excess in foreign markets at lower price than at home. • Good for importing consumers, maybe bad for import-competing industries. • Small impact, usually not fought with tariffs.

2. Ch 6 – NTB’s • Anti – Dumping Legislation • Dumping • Form of international price discrimination • Foreign buyers are charged lower prices than domestic buyers for same goods. • Selling in foreign markets for price below production costs. Forms of Dumping • Predatory • Price temporarily lowered to drive competitors out. • Same concept as predatory pricing. • Prices are then raised after firm gains market power. • Nations may respond with anti-dumping duties to eliminate price differences. • Little or no empirical evidence found to support it’s existence.

3. Ch 6 – NTB’s • Anti – Dumping Legislation • Dumping • Form of international price discrimination • Foreign buyers are charged lower prices than domestic buyers for same goods. • Selling in foreign markets for price below production costs. Forms of Dumping • Persistent • Goes on indefinitely • Same rationale as price discrimination. • Uses different elasticities of demand to sell to different consumer groups at different prices. • US anti-dumping laws are used to eliminate price discrimination that injures US industries. • Anti-dumping duties will be imposed if Dept. of Commerce determines good is being sold at Less Than Fair Value (LTFV), and is causing damage.

4. Ch 6 – NTB’s • Government Procurement Policies • or • “Buying American” Buy American Act, 1933 • Government purchases are to be made from domestic suppliers if the price is not “unreasonably” high. • Stipulations: • Must be “domestic”, usually at least 50% domestic component. • 6% Preference margin – US bid cannot be more than 6% higher than foreign bid. • Labor surplus area – 12% • Dept of Defense purchase – 50%

5. Ch 6 – NTB’s • Government Procurement Policies • or • “Buying American” Buy American Act, 1933 • Government purchases are to be made from domestic suppliers if the price is not “unreasonably” high. • Results: • Barrier to free trade. • Leads domestic suppliers to be inefficient. • Leads to higher costs for government projects. • Deadweight welfare loss in protective and consumption effect.