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Product Dumping in Third World Countries Case Study


Introduction

Third World countries should not be considered as the dumping grounds of products that are not successful, hazardous, or even too dangerous for sale within the U.S. market. Even if there are no rules, regulations or bans in the countries these products are exported to, allowing the sale and export of goods that have been proven to be dangerous are to become complicit in contributing to the suffering and possible death of thousands of people (Kao & Peng, 2016). Product dumping of this nature should be outright banned due to the negative consequences that it can bring about.

Was the Dumping Ethical?

From the perspective of the local laws in the third world countries where the products were dumped, the act was lawful; however, from an ethical standpoint, it is immoral and unethical. Even if it true that various individuals in these countries would not have had access to these products in the first place if they were not dumped there, the danger is simply too high for them to be utilized. It has already been proven that these products are too dangerous for sale in the U.S. market due to the adverse consequences they could have on a person’s health.

Exporting them does not remove these harmful effects, what is occurring is simply a devaluation on the part of the U.S. government and of American based companies on the lives of people living in third world countries (Moraga-González & Viaene, 2005). By knowingly dumping these products despite the obvious health risks involved, the entities responsible for the product dumping are stating that they do not value the lives of the people in these markets.

Examining the Dalkon Shield

Even if the Dalkon Shield helps in preventing unwanted pregnancies, the fact remains that it has serious health complications associated with its use. Yes, there are high rates of deaths during childbirth in various third world countries and it can be justified that the utilization of the Dalkon Shield, despite its potential adverse effects is a good thing. The problem though is the lower price of the Dalkon Shield in these countries is not due to altruistic reasons; it is merely companies getting rid of dangerous products that cannot be sold in markets with stricter safety controls. The actions of the U.S. government in supporting such activities are also extremely unethical since it is also not doing so for altruistic reasons; rather, it is merely helping to support a local American company at the expense of the health of the citizens of another country.

Obligation of Financial Managers

Financial managers are under the responsibility to protect the interests of their shareholders in whatever way they can that falls under legal and ethical principles. One of the current trends in operations among many global companies in the practice of Corporate Social Responsibility (CSR). CSR is a means by which a company judges how its actions contribute towards a concept known as “the general social good” wherein the operations of the enterprise are expected to help society and not be a detriment to it (McGee, 2008). The development of CSR came as a result of numerous scandals involving the actions of businesses that were shown to be damaging to both the environment and society.

Impact of Unethical Actions

Simply put, if the general public perceives the actions of a company as being harmful or socially destructive, they will likely patronize another business for their products and services. It is based on this principle that the actions of the companies in this case example are a direct violation of many CSR operational procedures. Yes, there are short-term gains for the companies when it comes to maintaining profitability, but the long term repercussions of such actions could cause many of their present and future customers to turn against them.

Evidence of this can be seen in cases where allegations of the use of sweatshops in the production of various U.S. fashion brands caused many of their customers to shift their product allegiances elsewhere. Based on this, the financial managers of this case neglected to take into account the ethical repercussions of their actions and, as such, did not adequately fulfill their obligation to their shareholders.

Examining the Ethics of Product Dumping

Just because dumping particular goods is not in violation of U.S. law does not mean that it is not immoral or unethical. For example, if a company had a stock of baby formula that was deemed as having the potential to cause brain defects in the minds of infants, is it ethical or even moral to knowingly export the milk to a third world country? The result of such actions would lead to an increase in children born with brain defects. Dumping the products would not be illegal, but the resulting number of babies born with brain defects that could have otherwise been avoided is horrifying (Xiang & Lai, 2012). Contributing to such actions is entirely immoral or unethical despite any arguments regarding giving people access to products.

What happens if they know the dangers?

Even if a country knows the risks of certain products, the fact remains that the U.S. government should take an ethical stance in preventing these tainted goods from reaching them. Yes, they are willing to accept them; however, for many of these countries, they just do not know the potential long-term consequences of these actions. The reason the FDA (Food and Drug Administration) exists in the U.S. is to prevent the possible long-term harm that could come about through the distribution of tainted food products. Third world countries sometimes do not have access to the same studies, equipment, or personnel to warn them of these dangers and, as a result, they willingly accept such items. Just because they know the risks does not mean they realize the full extent of what can come about (Wang, 2004).

The Dumpsters

Companies dump products for either maintaining their profit margins or reducing the losses they suffered from bad production decisions. Companies are not stupid; they are composed of numerous experts in their respective fields and, as such, while they know what they do is legally acceptable, they also know it is morally and ethically irreprehensible.

Discussion and Recommendation

The U.S. government cannot keep on protecting companies from the problems they developed by dumping them on other countries. New laws need to be put in place that specifically protects other nations from product dumping practices when it comes to goods that have been proven to be harmful.

Conclusion

Based on everything that has been presented so far, this paper can conclude that the product dumping of hazardous or even dangerous products should be outright banned due to the negative consequences that it can bring about. By doing such an act, a government or company contributes towards the long term suffering of potentially thousands of people that use these tainted products and develop the health risks associated with them.

Reference List

Kao, K., & Peng, C. (2016). Anti-dumping protection, price undertaking, and product innovation. International Review Of Economics & Finance, 41(1), 53-64.

McGee, R. (2008). Ethical Aspects of Using Government to Subvert Competition: Antidumping Laws as a Case Study of Rent Seeking Activity. Journal Of Business Ethics, 83(4), 759.

Moraga-González, J. L., & Viaene, J. (2005). Dumping in a Global World: Why Product Quality Matters. World Economy, 28(5), 669-682.

Wang, J. (2004). Anti-dumping Extended. Beijing Review, 47(46), 45.

Xiang, H., & Lai, M. (2012). Determining industry injury in China due to dumping: Theoretical and empirical research based on COMPAS model. Xitong Gongcheng Lilun Yu Shijian (Systems Engineering Theory & Practice), 32(9), 1871-1881.

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IvyPanda. (2020, September 1). Product Dumping in Third World Countries. Retrieved from https://ivypanda.com/essays/product-dumping-in-third-world-countries/

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"Product Dumping in Third World Countries." IvyPanda, 1 Sept. 2020, ivypanda.com/essays/product-dumping-in-third-world-countries/.

1. IvyPanda. "Product Dumping in Third World Countries." September 1, 2020. https://ivypanda.com/essays/product-dumping-in-third-world-countries/.


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IvyPanda. "Product Dumping in Third World Countries." September 1, 2020. https://ivypanda.com/essays/product-dumping-in-third-world-countries/.

References

IvyPanda. 2020. "Product Dumping in Third World Countries." September 1, 2020. https://ivypanda.com/essays/product-dumping-in-third-world-countries/.

References

IvyPanda. (2020) 'Product Dumping in Third World Countries'. 1 September.

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