Characteristics of dumping in international trade

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Assignment:

Question

USA is a developed country while Brazil is a developing country. Both USA and Brazil are the member states of World Trade Organisation (WTO). Since the year of 2000, Brazil has been exporting potatoes to USA at the average price of 2 USD per pound. Ten months ago, the price of potatoes from Brazil went down to 1 USD per pound, which is the same as the price of potatoes that are farmed and sold by the local famers in USA for the domestic market. Since the potatoes from Brazil are in better quality, 90% of customers in USA purchase potatoes from Brazil, which adversely affect the business of the local farmers in USA.

(a) Advise USA on whether the country is facing a dumping situation. In your advice, you should compare the three (3) characteristics of dumping in international trade. You should include the definition of each characteristic, and identify the difference between each characteristic.

(b) Following from question 1(a), analyse whether these characteristics are applicable to USA's situation.

Reference no: EM133291111

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