Double Coincidence Of

Double Coincidence Of

Double Coincidence (of wants). See Barter.

Drawback, an amount paid back from a charge, more specifically an amount of excise or import duty remitted when the commodities on which it has been paid are exported. Most drawbacks are paid on imported materials made up into finished goods.

Dummy Tender. See Collusive Tendering.

Dumping, a form of monopoly pt-ice discrimination: selling goods abroad at prices below those in the exporter's home market (after allowance for transport and other costs).

Producers adversely affected often apply the term as a criticism to all low-price competition, whether or not there is price discrimination between domestic and foreign markets, particularly where low prices can be traced to the use of cheap foreign labour. This is not dumping in the true sense, although in some cases it could be construed as a form of it (as where monopoly power in another country is exercised by employers to keep wage rates in the export trades below those in the rest of the economy). It is difficult in practice to distinguish between this case and labour which is cheap simply because of the relative abundance of foreign labour as a whole. Both may result in low prices for the goods they produce, but to protect home producers against competition from abundant labour would mean a loss of the benefits of world specialization and trade based on the principle of comparative cost.

True dumping, i.e. price discrimination, may be either persistent or temporary. Persistent or long-term dumping arises where the demand conditions facing a producer differ in home and foreign markets, so that his profits are increased by charging different rather than identical prices in the two markets. To maximize profits be will charge a lower price in the market where the elasticity of demand is higher (usually the export market). Such dumping is unintentional in the sense that if demand conditions in the two markets were similar prices charged would be identical after allowing for transport costs, etc. In the country receiving dumped products consumers gain (as they do from any kind of dumping): competing producers are faced with long-term problems of adaptation similar to those arising out of 'genuine' low-cost competition from overseas. Protection for aggrieved domestic producers is not justified on economic grounds, although there may be other grounds for it, as the desire to maintain small farmers in production for political or military reasons.

Temporary or intermittent dumping may be deliberately used as an aggressive weapon to eliminate competing domestic producers in the export markets. It may also arise from a desire on the part of producers in other countries to dispose of temporary surpluses without upsetting the home market price structure. These forms of dumping tend to dislocate domestic production in the export market while conferring only temporary gaits on consumers. A better case can be made out in theory for protection against this kind of dumping; but even here it is difficult in practice to limit it so that it does not become general protection against all kinds of foreign competition.

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