Foreign firms to break into a new market commonly undercut domestic prices and, hence, subsidise the consumer's costs of switching in order to get a positive market share. However, this may constitute the act of dumping as drawn in Article VI of the General Agreement on Tariffs and Trade (GATT)....

Asian firms frequently have to undercut domestic prices and subsidize switching costs in order to obtain a positive market share when entering European and the US markets. Such practices constitute dumping under Article VI of the General Agreement on Tariffs and Trade. We demonstrate that the...