BUSA 356 Lecture Notes - Lecture 14: Trade Bloc, Free Trade, Multilateral Investment Guarantee Agency
6 Mar 2018
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The globalization of trade bypassed latin america and africa due to the import substitution strategies these countries embraces. Venezuela adopted multiple exchange rates (an official rate, a rate for debt payments, a rate for. They also adopted policies that required importers to apply for foreign exchange at one of these rates and the wait time could extend to two months to obtain only one-third of the authorized rate. They could then submit another request for the balance once the merchandise arrived (but if more than six months passed they would have to continue to resubmit their application). The ad valorem rate (tariff) went as high as 135% (average rate was 37%). Consumer goods were subject to the highest tariffs, low and intermediate goods (cement) and capital goods were in the middle. There were also many exceptions to this system, tariffs were generally applied on a case-by- case basis. Importers could be paying two different rates on the same goods.
