dumping (idea)

The WTO defines "dumping" as "exporting a product at a price lower than the price it normally charges on its home market", and outlines "anti-dumping" agreements, where governments are constrained on how they "can or cannot react to dumping" - note that the nation upon which the products are dumped are the ones constrained, not the home country of the dumping company.

On a purely economic basis, this dumping (also described in the node of that name) seems quite beneficial to the target country, as they're getting goods at a cheaper price than in the company's home market. And we all want cheaper stuff, right? So why are anti-globalization protesters pushing for tougher anti-dumping laws?

There's a popular tactic called predatory pricing, where a company will dump huge stocks of cheap products on a particular country at prices below the cost of production (often at a loss), driving local competitors out of business. Once the company gains a monopoly (or at least major market share), it's free to jack up prices again, secure in a captive market. Ever wonder how Coca-cola and Pepsi manage to take over local beverage industries all over the world?

This is especially damaging in the case of Third World agricultural operations driven out of business by large grain deliveries (ironic, since many of these enter the country as food aid). Good governments will make sure local food suppliers are not destroyed, and will keep their countries from growing wholly dependent on food imports.

Another, more insidious form of dumping is the shipping of banned chemicals over the border in order to dispose of huge stocks of unsellable merchandise. When DDT was banned in the US in the 60's and 70's, Third World countries suddenly received a lot of cheap pesticide, courtesy of Bayer. DDT is still in use in some parts of India and the Philippines, despite its harmful effects on both humans and the environment. These days, Chlordane and Malathion are still widely available.

Every time the FDA issues warnings or bans another drug, you can bet we'll get several "new and improved!" formulations over here. Phenylpropanolamine-based cough medicine is still being sold over the counter, but some large multinationals have quietly taken it out of their in-house pharmacies (for their employees' protection, of course).

The recent furor over genetically-modified food merely meant that Monsanto's test farms moved out to relatively media-shielded sites, such as the Southern Philippines. Of course, this is also a prime test market, especially with all these people unable to afford GMO test kits (and generally, too poor to care).

Isoprophyl alcohol, despite having been banned for antiseptic use in 2000 by the local Bureau of Food and Drugs, is still being heavily marketed by Johnson & Johnson, as "Band-Aid" brand rubbing alcohol. Since it is an industrial cleaning agent, FDA safety standards call for keeping it away from eyes, skin and clothing, but in the Philippines, you see TV ads where this product is being used on babies. A rival local alcohol manufacturer (who sells the safer ethyl alcohol), backed by the local medical associations, has run several ads calling for enforcement of the ban, but as usual, superior amounts of money and lawyers can defeat any cause.