What is the domestic industry?

When there is a very important product in the economy in general, it is normal for a group of companies to take charge of its production. In case this does not happen, the government or state should take care of it. But ... does this have a name? Yes. We speak of a domestic industry to the concept used to refer to the set of companies that manufacture the same good and whose joint production is very necessary or of great importance for the national economy of a certain country.

However, it is normal that this concept comes to mind the fact of being able to harm or harm other producers in the country due to having to produce a good or service that is necessary. For this reason, the World Trade Organization (WTO) has established protectionist measures that protect national companies from the unfair commercial practices that may occur. The most common are duty or restrictions on importance, which are usually quantitative.

El dumping or damage to a domestic industry

The damage that can occur to the domestic industry are the following:

  • When there is a threat. To do this, the WTO must determine that there is a possibility of injury to the domestic industry. Real data must be given that a certain threat is occurring and in what measures.
  • When there is serious damage. To determine that there is serious damage to the national industry by others, it is necessary to analyze certain influencing factors. These causes are those already mentioned (such as the level of exports e imports produced), as well as the losses obtained by the companies, the profits by the others, the lowered productivity, the employment it is having in the domestic industry, among other factors.

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