Read the case given below and answer the questions given at the end.

CASE STUDY – II
Unfair Protection and Valid Defense

―Mexico Widens Anti-Dumping Measure … Steel at the Core of US-Japan Trade Tensions … Competitors in other Countries Are Destroying an American Success Story … It must be Stopped‖, scream the headlines around the world. International trade theories argue that nations should open their doors to trade. Conventional free trade wisdom says that by trading with others, a country can offer its citizens a greater volume of goods at cheaper prices than it could in the absence of it. Nevertheless, truly free trade still does not exist because national governments intervene. Despite the efforts of the World Trade organization (WTO) and smaller group of nations governments seem to be crying foul in the trade game now more than ever before.We see efforts at protectionism in the rising trend in governments charging foreign producers for ―dumping‖ their goods on world markets. Worldwide, the number of antidumping cases that were initiated stood at about 150 in 1995, 225 in 1996, 230 in 1997and 300 in 1998. There is no shortage of similar examples. The United States charges Brazil, Japan and Russia with dumping their products in the US market as a way out of tough economic times. The US Steel industry wants the government to slap a 200 per cent tariff on certain types of steel. But car makers in the Unites State are not complaining, and General Motors even spoke out against the anti-dumping charge-as it is enjoying the benefits of low-cost steel for use I n its auto-production. Canadian steel makers followed the lead of the United States and are pushing for antidumping actions against four nations.Emerging markets, too, are jumping into the fray. Mexico recently expanded the coverage of its Automatic Import Advise System. The system requires the importers (from a list of countries) to notify Mexican officials of the amount and price of shipment ten  days prior to its expected arrival in Mexico. The ten days notice gives domestic producers advance warning of incoming loe-priced products so they can complain of dumping before the products clear customs and enter the marketplace. India is also getting onboard by setting up a new government agency to handle anti-dumping cases. Even Argentina, China, Indonesia, South Africa, South Korea and Thailand are using this recently – popularised tool of protectionism.Why is dumping on the rise in the first place? The WTO has made major inroads on the use of tariffs, slashing them across almost every product category in recent years. But the WTO does not have the authority to punish companies, but only governments. Thus, the WTO cannot pass judgements against individual companies that are dumping products in other markets. It can only pass rulings against the government of the country that imposes an anti-dumping duty. But the WTO allows countries to retaliate against nations whose producers are suspected of duping when it can be shown that:(1) the alleged offenders are significantly hurting domestic producers, and (2) the export price is lower than the cost of production or lower than the home-market price.Supporters of antidumping tariffs claim that they prevent dumpers from undercutting the prices charged by producers ina target market and driving the out of business. Another claim in support of antidumping is is that it is an excellent way of retaining some protection against potential dangers of totally free trade. Detractors of antidumping charge that once such tariffs are imposed they are rarely remove. They also claim that it costs companies and governments a great deal of time and money to file or arguetheir cases. It is also argued that the fear of being charged with dumping causes international competitors to keep their prices higher than would otherwise be the case. This would allow domestic companies to charge higher prices and not lose market share-forcing consumers to pay more for their goods.

Questions

1. WTO cannot punish individual companies for dumping and can only take actions against individual countries. Is this a wisepolicy? Why or why not?
2. Why is protectionism on the rise in recent years?