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The existence of price discrimination between domestic and export markets generally indicates the presence of a market distortion in the home market, such as import barriers, a monopoly or cartel, or some combination of these factors that gives domestic producers the ability to maintain domestic prices at a level higher than export prices. Under such circumstances, dumping is a mechanism through which competitive outcomes are determined, in effect by the distortion itself, not the relative competitiveness of individual producers. In the short run, dumping enables protected firms to run their facilities at higher utilization rates than would be economically feasible in an open market, giving them a major cost advantage unrelated to their comparative cost competitiveness. Over the long run, dumping can deter investment in the market where it is occurring and, conversely, may well foster increased investment in the protected market. Over time, through such dynamics, dumping may permit an initially less efficient (but protected and cartelized) industry to displace an equally or efficient competitor, that is, not benefiting from a protected home market.

Because dumping can result in the erosion or destruction of national industries for reasons unrelated to normal market competition, simply permitting dumping to occur without any regulation could endanger the political consensus which supports the current liberal multilateral trading system. Friction arising out of dumping can become particularly acute when dumping injures or destroys industries regarded as vital to national economic well-being and national security, a phenomenon which has been observable at a number of points in this century.

Fundamentally, the controversy surrounding antidumping is a symptom of a larger phenomenon, the divergence which exists between various national markets with respect to competition policy and which has frustrated all attempts at consensus for at least half a century. Antidumping measures have been assigned, more or less by default, the task of addressing specific problems created by this divergence. They are admittedly an imperfect tool. But until broader national differences with respect to competition policy are reconciled, these measures remain essential to the world trading system, acting, in the words of John Jackson, as an "interface mechanism... necessary to allow different trade systems to trade harmoniously."

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Today's open multilateral trading system stands as one of the greatest achievements of the generation of statesmen that laid the foundations of the postwar world order. The legal underpinning of this system is provided by the General Agreement on Tariffs and Trade (GATT) and its ancillary agreements and codes, currently administered by the newly formed World Trade Organization. The GATT has made possible the progressive liberalization of world trade through the basic mechanism of binding commitments by signatories to reduce trade barriers on a most-favored-nation basis. The GATT has survived, however, in significant part, because its framers were wise enough to recognize that the system would not be sustainable in the absence of certain exceptions to the general com-

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