Letters: Protectionism vs dumping

In the news report “Protectionism a threat to world economy” (October 16), Lawrence Summers, assistant to the US President Barack Obama for economic policy, is reported to have said that protectionism was a rising threat to the global economy and helped no one in the end. Protectionism per se is not conducive to the growth of free trade. However, if domestic industry is confronted by dumping of foreign goods, protectionism as an anti-dumping measure (imposition of anti-dumping duty, blanket ban and so on) becomes a necessity for the survival of the domestic industry and is, therefore, morally justified.

Dumping is said to take place when an exporter in a foreign country deliberately disposes of the goods manufactured by it, by exporting them either below its domestic selling price or below its cost of production. Anti-dumping duty varies from product to product and country to country. It is allowed under the multilateral trade rules. For instance, the commerce ministry has recently recommended to its finance counterpart to impose an anti-dumping duty of up to $547 per tonne on import of phenol (a chemical used by plywood industries, pharmaceuticals and so on) from Japan and Thailand.

M Krishnan, Mumbai

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