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Protections Against Dumping Products

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When it comes to free trade agreements between member countries, there are obvious advantages like the efficiency of importing and exporting which would help advance economic growth and development. However, in spite of these gains, every country tries to protect certain industries from entering into their markets through the placement of legal restrictions like tariffs/quotas so as to reduce the threat of external competition and protect domestic employment. This is known as protectionism.
Similarly, in this commentary, the economies of China and Australia are spoken about. Information in the article states that Australia is planning an anti-dumping investigation due to China repeatedly dumping paper onto their markets. Thus, it can be seen how protectionism is essential in order to prevent the dumping of Chinese paper onto domestic markets.
A country is said to be “dumping” a product if it exports its goods at a predatory price i.e. a value much lower than original production costs, somewhere below the price charged in the domestic market and is considered illegal. An anti-dumping duty is a protectionist tariff imposed by the domestic government on foreign imports that it believes are priced below the fair market value. Figure1.1 shows how, as a result of China dumping paper, Australian producers are affected because customers obviously get attracted to lower prices,(Pdumping) thereby reducing sales revenue for domestic producers from l+c+g+h to g, as the demand for
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