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Yes and no. The specific provision is meant to allow governments to ease sudden shifts. As an example, say the weather in some country Y was extraordinarily gre

Yes and no. The specific provision is meant to allow governments to ease sudden shifts. As an example, say the weather in some country Y was extraordinarily great for growing tulips this year. As a result, they're exporting enormous amounts of tulips, at really cheap prices. Nobody is buying durch tulips this year, because they're more expensive. All dutch tulip farmer ("tulipers"?) will go bankrupt, because np business can survive a full year with no revenue and full costs. When next year comes around, the weather in country Y is back to normal, but the dutch tulip industry has been shattered.

danbruc 9y ago
Which raises the question which unforeseen temporary changes are supposed to be at play here.
- Spivak 9y ago
  They're not unforeseen, China is giving subsidies for solar panel manufacturers. Not many people object to using subsidies for domestic industries or R&D but using them for exports is just state level predatory pricing.
mowenz 9y ago
That's a pretty aggressive stance government intervention. I'm all for government intervention when it is needed, but honestly your example ignores the fact that: farmers actually solved this problem ages ago, and yes on the free market, by using futures contracts and other financial insurance to manage their finances.
padobson 9y ago
This leads me to two questions: Has there ever been a situation where temporary conditions in some country (like Country Y) led them to satisfying worldwide demand? It seems that even in a year where foreign competition was strong, domestic producers would be able to find SOME revenue for their goods. What would stop the industry from rebuilding the following year? Supplies have dropped as foreign production decreased, and the demand (presumably) has remained the same. The human and natural resources and infrastructure couldn't have changed all that much in the course of the year. It seems to me that a few enterprising tulip producers would be able to recognize the 1-year aberration, find a way to weather the storm, and expand their market share the following year against reduced domestic competition.

danbruc 9y ago

Which raises the question which unforeseen temporary changes are supposed to be at play here.

Spivak 9y ago
They're not unforeseen, China is giving subsidies for solar panel manufacturers. Not many people object to using subsidies for domestic industries or R&D but using them for exports is just state level predatory pricing.

mowenz 9y ago

That's a pretty aggressive stance government intervention. I'm all for government intervention when it is needed, but honestly your example ignores the fact that: farmers actually solved this problem ages ago, and yes on the free market, by using futures contracts and other financial insurance to manage their finances.

padobson 9y ago

This leads me to two questions: Has there ever been a situation where temporary conditions in some country (like Country Y) led them to satisfying worldwide demand? It seems that even in a year where foreign competition was strong, domestic producers would be able to find SOME revenue for their goods. What would stop the industry from rebuilding the following year? Supplies have dropped as foreign production decreased, and the demand (presumably) has remained the same. The human and natural resources and infrastructure couldn't have changed all that much in the course of the year. It seems to me that a few enterprising tulip producers would be able to recognize the 1-year aberration, find a way to weather the storm, and expand their market share the following year against reduced domestic competition.