ADM 3318 Chapter Notes - Chapter 6: Countervailing Duties
16 Jun 2018
School
Department
Course
Professor
The Political Economy of International Trade
Instruments for Trade Policy
Trade policy uses six main instruments
Tariffs
A tariff is a tax levied in import
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There are two categories
Specific tariffs
These are levied as a fixed charge for each unit of a
good imported
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□
Ad valorem tariffs
These are levied as a proportion of the value of the
goods
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□
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Subsidies
This is a government payment to a domestic producer
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It can take many forms
Cash grants
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Low-interest loans
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Tax breaks
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Government equity participation
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Import quotas
This is a direct restriction on the quantity of some good that may be
imported into a country
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Voluntary export restraints
A voluntary export restraint is a quote on trade imposed by
the exporting country
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§
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Local content requirements
This demands that some specific fraction of a good be produced
domestically
This can be in either physical terms or value terms
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§
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Administrative policies
These are bureaucratic rules designed to make it difficult for
imports to enter a country
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Antidumping policies
Dumping is variously defined as selling goods in a foreign market at
below their costs of production, which is below their "fair" market
value
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Antidumping policies are designed to punish foreign firms that
engage in dumping
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This is also known as countervailing duties
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Chapter 6
Monday, January 22, 2018
11:10
Document Summary
A tariff is a tax levied in import. These are levied as a fixed charge for each unit of a good imported. These are levied as a proportion of the value of the goods. This is a government payment to a domestic producer. This is a direct restriction on the quantity of some good that may be imported into a country. A voluntary export restraint is a quote on trade imposed by the exporting country. This demands that some specific fraction of a good be produced domestically. This can be in either physical terms or value terms. These are bureaucratic rules designed to make it difficult for. These are bureaucratic rules designed to make it difficult for imports to enter a country. Dumping is variously defined as selling goods in a foreign market at below their costs of production, which is below their fair market value. Antidumping policies are designed to punish foreign firms that engage in dumping.
