International Baccalaureate Internal Assessment Essay

The European thrill has obligate provisional anti-dumping duties on imports of ceramic tiles from mainland China.The move comes following an investigation initiated by and by a complaint lodged by the European Ceramic Tile Manufacturers confederacy (CET) on behalf of 69 tile makers in the EU, the focus said.The duties range in the midst of 26.2% and 73% depending on the company and last for six months. They could be protracted for five years and are think to punish tile manufacturers from China who sell tiles below constitute-price in the EU.Alfonso Panzani, the president of the CET, said that the duties were not intended to exclude Chinese products from the EU foodstuff but to bring Chinese prices to a fair level, making it possible for ceramic tile output signal to continue in Europe, and creating the conditions for healthy rival to develop.He added in that location is no reason why we should be less competitive in Europe than when we export outside of the EU.The provi sional duties apply to glazed and glassless ceramic flags and paving, hearth or w all tiles and unglazed ceramic photomosaic cubes.(c) 2011 European Voice. All rights reserved.According to the provided article, the European charge (an executive assort of the European Union) has recently resorted to the implementation of a harborive duty of up to 73% on Chinese ceramic products in order to protect the European market from Chinese dumping techniques (Protective tariff a tariff designed to shield domesticated producers of a good or improvement from the competition of foreign producers.1 Dumping the sale of products below cost in a foreign country,1 often done to do a monopoly over that product in a particular country). veneering pressure from the European Ceramic Tile Manufacturers Federation (CET), an organization representing legion(predicate) European tile firms who suffer from cheap competition with Chinese firms, the Commission imposed these duties to drive up the cost o f imports and stimulate profit for domestic producers (Competition the presence in a market of independent buyers and sellers competing with one another.1 Imports spending be individuals, firms, and administrations for goods and services produced in foreign res publicas.1 pull ahead the amount of money a business earns after paying all expenses.)The conflicting economical values of free trade and protectionism are dispute in this situation as to which forces are allowed to control a nations economy the government and domestic producers or the global market and consumer welfare (Free trade the absence of artificial barriers to trade among individuals and firms in divergent nations.1 Consumer welfare individual consumer satisfaction depending on prices and income.) Since domestic ceramic suppliers are threatened with economic ruin from such cheap products, the Commission turned to protectionism to force a more equal domestic competition and punish dumping companies through a tariff despite the consequences of high prices (Protectionism policies that aim at restricting the flow of imports into a country.2).The anatomy and economic effects of a tariff kindle be demonstrated in Figure 13 where the perfectly elastic world supply (Sworld) has increase in price (to P2) due to the tariff (Sworld + tariff) and, thus, perplex reduced the sum of Chinese imports from the difference between Q1 and Q2 to that of Q3 and Q4. The benefits of a tariff not exclusively include a reduction in imported ceramic, but excessively gains in producer bare(a) and tax revenues earned by the government (Producer surplus the difference between the minimum price a producer is willing to accept for their good and the price they actually receive). Due to this tariff, the authorized quantity supplied domestically at Q2 has now increased to Q4 and domestic suppliers can now sell their ceramic at high(prenominal) prices (P2), allotting for an increase in producer surplus ( n ation 1). Since the government collects the fees paid by the tariff, they now have more funding of which they would presumably return to the public.While tariffs may be advantageous for domestic producers and the government, they reap these benefits at a primary privation to the consumer from the higher prices needed to buy ceramics, and Chinese suppliers whose product is less demanded in the European Union. The major disadvantage of a tariff comes from the reduction in consumer surplus where it had originally occupied Areas 1,2,3,4, & 5 and was reduced to only Area 5 because consumers must now buy ceramics at a higher price (P2). Although Areas 1 through 4 represent the total consumer surplus reduction, since Areas 1 and 3 are beneficial to a society, so Areas 2 and 4 represent the net loss to society through higher prices.Therefore, in order to protect the European ceramic producers from being finishedly swept from the market due to the dumping efforts of Chinese ceramic export ers, the Commission is justified in the imposition of an anti-dumping tariff because the societal loss of an entire industry is greater than that of forcing higher domestic prices to the consumer.1 Defined by Economics Principles, Problems, and Policies, 15th edition textbook by Campbell R. McConnell and Stanley L. Brue, publisher McGraw-Hill Irwin.2 Definition derived from 2 Definition from Ziogas, Constantine. Economics for the IB Diploma Standard and high Level, 2008.3 Graph adapted from original at Effects of Tariffs. Linux users Group at WSU. Chart. 04 May 2007. Web. .