State financing of export operations is also referred to non-tariff methods of international trade regulation. Funding as a method trade policy discriminates against foreign companies in favor of national producers and exporters. Financial methods of trade policy include subsidies, lending and dumping.
Subsidy- a cash payment aimed at supporting national producers and indirectly discriminating against imports.
Subsidies vary widely. By the nature of payments, direct, indirect and cross-subsidies are distinguished.
Direct subsidies are direct payments to the exporter in the amount of the difference between his costs and the income he earned. Direct subsidies are subsidies to a manufacturer when it enters foreign market.
Indirect subsidies - hidden subsidies for exporters through the provision of tax incentives, preferential terms of insurance, crediting, refund of import duties, etc.
Cross-subsidization is subsidizing one industry or sector of the economy at the expense of another industry or sector through measures state regulation.
From the point of view of objects of subsidies, export subsidies and domestic subsidies are allocated.
Subsidies provided to national producers of export goods in the form of financial incentives and budgetary payments are called export subsidies. Export subsidies allow goods to be sold to foreign buyers at a lower price than domestically. Export subsidies lead to increased sales of goods in the foreign market, increased sales and artificial increase in the competitiveness of export goods. Consequently, subsidies are assistance to export sectors by reallocating taxpayer funds through the state budget.
The fundamental difference between an import tariff and an export subsidy is that an import tariff increases the domestic price of imported goods, while an export subsidy increases the domestic price of exported goods. If an import tariff imposed by a large country improves its terms of trade, then an export subsidy, on the contrary, worsens its terms of trade, reducing domestic demand for exported goods.
An import tariff improves a country's terms of trade at the expense of the rest of the world. An export subsidy worsens a country's terms of trade in favor of the rest of the world.
Export subsidies always benefit producers of export goods and exporters. At the same time, the country's economy will always suffer net losses. Subsidization effectively means selling to foreign buyers at prices below the actual cost of producing them in the exporting country. Therefore, they represent an outflow of funds from the country.
The exporting country can provide subsidies to maintain employment in export industries, carry out structural reforms in the economy, oust foreign competitors from markets, and expand exports as a source of foreign exchange.
Subsidies provided to manufacturers of goods that compete with imports are called domestic subsidies. Domestic subsidies help substitute domestic goods for imported goods.
Intensive export subsidies to suppress competitors can take the form of dumping.
Dumping is the sale by an exporter of goods for overseas market at prices lower than prices existing for a similar product in the domestic market.
Dumping can be carried out both at the expense of the resources of individual firms seeking to seize the foreign market for their products, and at the expense of government subsidies to exporters.
Dumping takes the following forms:
1. Sporadic (random) - temporary, episodic sale of goods on a foreign market for low prices due to the fact that exporters have accumulated large stocks of goods, due to the fact that domestic production volumes of goods exceed the capacity of the domestic market.
2. Rogue dumping - a temporary decrease in export prices in order to oust competitors from the market and the subsequent establishment of monopoly prices.
3. Permanent dumping - constant export of goods at a price below the fair value.
4. Reverse dumping - overstatement of export prices in comparison with the sales prices of the same goods on the domestic market.
5. Mutual dumping - counter trade of two countries in the same goods at reduced prices.
To protect national producers, the state can not only restrict imports, but also encourage exports.One of the forms of stimulating domestic export industries is export subsidies, that is, financial incentives provided by the state to exporters to expand the export of goods abroad. As a result of these subsidies, exporters are able to sell goods on the external market at a lower price than on the domestic one. Export subsidies can be direct (payment of subsidies to a manufacturer upon entering the foreign market) and indirect (through preferential taxation, lending, insurance, etc.).
The impact of an export subsidy is shown in Figure 4.3. Producers receiving subsidies find it more profitable to export rather than sell on the domestic market. But in order to expand supplies to the external market, they must lower export prices. The subsidy covers losses from price reductions, and export volumes grow. At the same time, since due to export growth less goods goes to domestic market, the internal price for it increases (from P to Pd). An increase in price causes an increase in supply from S0 to S1 and a decrease in demand from D0 to D1. As a result, consumers incur losses (area a + b), and producers receive additional gains (area a + b + c + d + e). But in order to assess the consequences of export subsidies for the country as a whole, it is necessary to take into account the costs of the subsidy, which will be borne by the state budget (that is, taxpayers). To do this, the size of the subsidy per unit of exported goods must be multiplied by the new volume of exports (S1-D1) Even if we assume that the domestic price increases by the entire amount of the subsidy (which is possible with an infinitely high elasticity of demand for imports in the world market), the government's costs will be equal (B + c + d + e + f), which means that the welfare losses of the country as a whole will amount to the area (b + f) However, in reality, these losses will be even greater. The elasticity of demand for imports in the importing countries is obviously not infinitely large, so the domestic prices in the exporting country will increase by less than the subsidy provided, and, therefore, the budgetary costs will be greater than the area of the rectangle (b + c + d + e + f)
Figure 4.3
Export subsidies are prohibited under the GATT / WTO rules. If they are used, then importing countries are allowed to retaliate by levying countervailing import duties.
Export subsidies are financial assistance provided by the government or other government agency the manufacturer of the export product. Export subsidies take various forms:
direct translation Money;
obligations to transfer such funds;
refusal to receive income due to the state;
preferential or gratuitous provision of goods and services;
preferential purchase of goods;
commissioning a non-governmental organization to perform one or more of the above functions.
Specific export subsidies include subsidies, the use of which is limited to certain organizations or a group of organizations, an industry or a group of industries, creates reasonable advantages for them in comparison with other organizations and is actually or legally associated with the development of exports or import substitution.
Production subsidies have advantages over customs tariffs in that they stimulate the development of national production and do not cause an absolute reduction in consumption, since they do not raise the level of domestic prices above world prices.
The flip side of export subsidies is countervailing import duties provided by countries where export flows of goods and services are directed.
Countervailing duties are a response to export subsidies that heighten tensions in international trade... As a result of the use of countervailing import duties, the exporting country does not subsidize national exports, but, on the contrary, finances the budget of the importing country. Countervailing (or anti-dumping) duties neutralize foreign export subsidies. Special anti-dumping legislation characterizes export subsidies as “unfair” competition. In this regard, the Agreement on Subsidies and Countervailing Measures was adopted (“Code on Subsidies”, 1993, Uruguayan Multilateral Trade Negotiations under the GATT).
The "Subsidies Code" provided for the creation of normal conditions for competition in the world market, the elimination of the so-called prohibited export subsidies. However, this does not solve the problem, because there are ways of state subsidizing of domestic exports bypassing the WTO (until 1995 GATT).
Non-tariff restrictions during foreign trade
The use of tariffs in industrialized countries declined significantly after World War II (1939-1945). At the same time, the role of import and export quotas, voluntary export restrictions (VER) and other non-tariff barriers is growing.
Non-tariff barriers are one of the forms of state protectionist policy; a system of restrictions pursuing a reduction in imports of goods; all sorts of barriers that states erect to impede trade between countries.
Non-tariff barriers include:
quality standards;
sanitary restrictions;
requirements for the environmental performance of equipment;
restrictions on the issuance of import licenses;
administrative bans on the sale of certain types of products in specific countries, etc.
There are three large groups of non-tariff restrictions on foreign trade regulation.
Foreign trade restrictions aimed at direct restrictions on imports to protect certain sectors of domestic production. These are measures for licensing and countering imports, anti-dumping and countervailing duties, voluntary export restrictions, etc.
Administrative restrictions - technical standards and norms, sanitary and veterinary forms, requirements for packaging, labeling, etc.
Indirect impact on foreign trade - licenses, quotas (contingents).
Import and export licensing means that a special agency on behalf of the state issues a permit for the import and export of goods. There are two types of licenses:
automatic (or general) licenses allowing the import and export of listed products for a specified time;
non-automatic (one-time), which allow the import and export of goods with an indication of their quantity, value, country of origin (or destination), and sometimes the customs point through which the given goods are imported or exported.
The most widespread of all types of non-tariff restrictions are quotas (or contingents) for the import and export of goods.
A quota in macroeconomics in relation to international trade is a non-tariff restriction (barrier). Distinguish between an import quota and an export quota.
An import quota is one method of introducing quantitative restrictions for protectionist purposes. It can limit the value of imports allowed to be brought into a country in this year... An import quota can also be used as a form of economic pressure on the importing country. There are two types of import quotas:
absolute quota - the amount of products allowed to be imported into a given country;
tariff quota - permission to import a specific product within a certain period with the payment of duty at a reduced rate.
An export quota is a way to quantitatively restrict the export of goods and services to other countries and prevent a decrease in export prices and, consequently, export earnings. Sometimes export quotas are aimed at securing the supply of goods in the domestic market in order to prevent excessive price increases for them domestically. The export quota is applied and how quantitative indicator, showing the role of exports of goods and services for the country's economy, industries and enterprises. In the last decade of the XX century. the share of exports in the GDP of the USA and Japan was a little more than 10%, Great Britain and France - about 24, Germany - 34, Belgium - 70%,
The mechanism of functioning of quotas is similar to the import tariff:
domestic prices rise above world prices;
the supply of imported goods is limited. But quotas differ from tariffs in two respects.
First, quotas do not increase imports. Therefore, the difference between domestic and world prices increases, which leads to an increase in profits from imports (including monopoly ones). With a tariff, imports gradually increase, while domestic prices fall following world prices.
Secondly, quotas restrict imports, as a result of which they completely isolate the domestic market from the penetration of new foreign goods, which guarantees absolute protection of the domestic market from foreign competition. The import tariff does not directly limit the volume of imported goods, because the importer is required to
there is one thing - to pay customs duty... V last years priority in foreign trade for the use of quotas, rather than tariffs, for two reasons:
Insofar as tariff rates are established by international trade agreements and governments do not have the right to raise tariffs, they use import quotas to protect their economies from foreign competition.
Those industries that need protection from foreign competition choose import quotas, since it is easier to obtain licensing privileges than imposing tariffs.
It is believed that the use of import quotas is most preferable in free competition, when the results of quotas are comparable to the results of the import tariff.
The economic consequences of the introduction of an import quota can be illustrated in Fig. 15.3.
From fig. 15.3 the following conclusions follow.
Consumer welfare has worsened as prices rise as a result of import quotas, thereby reducing consumer surplus by the region's size ("A + b + c + d + e ").
The welfare of producers improved as they increased their output as a result of higher prices. Their additional payoff was the area "a".
Quota
Region ("with + d ") represents a margin on authorized imports and means a redistribution of income from consumers (a kind of transfer) in favor of the authorities in charge of import licenses.
Share of consumer damage ("A + b + c + d + e") is compensated by the producers' gain - "a" and those who issue licenses ("c + d"). The net loss of welfare of the nation is the area ("b + e").
The net loss of welfare of a country from the introduction of quotas can be higher in comparison with the net loss of the imposition of an import tariff in two cases:
when a quota causes the monopoly power of a national manufacturer or a foreign importing firm;
when import licenses are allocated inefficiently.
There are the following methods of placing import licenses:
open auction: the state grants a license to the firm that offers the highest price for it;
a system of explicit preferences: the government grants import licenses to more prestigious firms in a volume that corresponds to their share in the total volume on the eve of the introduction of quotas;
“Cost method”: licenses are issued to firms that have large production facilities and other resources.
One of the non-tariff instruments of state regulation of foreign trade is voluntary export restrictions (VER).
Voluntary Export Restrictions (VERs) are a kind of export quota, a minimum export price that is imposed by developed countries on economically weak countries.
The country "voluntarily" restricts its exports under the threat of more significant trade policy measures from its partners. V Lately more than a hundred agreements on "voluntary" export restrictions and on the establishment of minimum import prices (covering the products of the textile industry, ferrous metallurgy, consumer electronics, etc.) have been concluded in the world.
Voluntary export restrictions have two main specific features that determine some of the advantages in trade policy. First, they are less noticeable on
national buyers versus import tariffs or quotas. In this regard, buyers are more sympathetic to them. Second, with voluntary export restrictions, foreign firms can set higher prices than with tariff restrictions or with import quotas. Consequently, foreign partners can, to a certain extent, compensate for the decrease in the volume of exports through higher prices for them.
Voluntary export restrictions have been used since the 1950s. XX century in trade relations between the United States and European countries, on the one hand, and Japan, on the other, with regard to textiles. Then this type of non-tariff restrictions began to be applied by the newly industrialized countries.
Dumping and trade embargo are also non-tariff forms of restrictions on foreign trade.
Dumping is the sale of goods abroad at a price lower than that at which the exporter sells in the domestic market, or lower than the cost price in the country of origin. Dumping as a form of unfair competition is aimed at ousting a competitor and capturing the sales market. Losses from the sale of goods at dumping prices are covered different ways:
the sale of other goods at high prices;
selling a similar product at inflated prices after a competitor is ousted from the market;
receiving subsidies from the state that encourages exports.
In 1967, within the framework of the GATT (now the WTO), an international anti-dumping code was adopted, regulating the procedure for identifying and proving dumping, as well as ways to compensate for the damage caused to firms in an importing country that produces similar products. If the fact of dumping is established, the importing party may impose anti-dumping duties on imported goods. The anti-dumping legislation adopted in Austria in 1962 for the first time defined a quantitative indicator of commodity dumping, according to which the export price is considered dumping if it is at least 20% lower in comparison with prices in the domestic market or 8% lower than the world price. Dumping is the result of monopoly market power and is used to strengthen it. The legislation of many countries, as well as the documents of the European Union (EU), provide for measures against dumping, in particular anti-dumping duties.
Dumping is used, as a rule, during periods of economic downturns, that is, it is temporary in nature, because private firms cannot constantly sell their goods below its cost. There are the following types of dumping:
constant dumping reflects the long-term tendency of monopoly firms to obtain monopoly profits by selling goods at higher prices in the domestic market in comparison with the world market, where competition from foreign firms is high;
sporadic dumping is the irregular sale of goods on the world market at a lower price in comparison with the national market. This type of dumping is observed as a result of overproduction of goods and a desire to prevent a decline in prices in the national market;
predatory dumping is the temporary sale of goods in foreign markets below its cost of production. The use of this type of dumping is aimed at eliminating competitors and then raising prices; as a result, the preconditions are created for ensuring monopoly power.
Trade embargo - a prohibition by a state of the import into any country or export from any country of certain types of goods. Such economic sanctions are carried out not for economic interests, but for political reasons. A trade embargo can apply to one country or be collective in nature, according to a UN decision. The embargo, by limiting trade relations, causes economic damage to all countries participating in it. However, those countries that do not join the trade embargo may have some benefit, as conditions for the growth of their exports of goods arise.
If the government considers it necessary to stimulate the export of national producers, TO it can provide them with subsidies from the budget in one form or another.
@ Subsidy - a cash payment aimed at supporting domestic producers and indirectly discriminating against imports.
By the nature of payments, subsidies are divided into:
Direct - direct payments to the exporter after he completes the export operation in the amount of the difference between his costs and the income he received. Direct subsidies are subsidies to a manufacturer when it enters a foreign market. Since the early 1960s, the subject of direct subsidies has been high-value industrial exports of developed countries - ships, aircraft, etc. However, direct subsidies are prohibited by the BTO rules and their application is too obvious for trading partners who can use retaliatory measures;
Indirect subsidies - hidden subsidies for exporters through the provision of tax incentives, preferential insurance terms, loans at a rate below market rates, the return of import duties, etc.
Subsidies can be provided both to producers of goods that compete with imports and to producers of goods that are sold for export.
For producers, in both cases, the subsidy is a negative tax because it is paid to them by the government rather than deducted from their profits.
@ Domestic subsidy - most disguised financial method trade policy and discrimination against imports, which provides for budgetary financing of the production of goods that compete with imported goods within the country.
Rice. 7.5. Economic effect domestic subsidies
Suppose that in a small country the domestic supply of goods is S d, and demand is D d (Figure 7.5). The supply of the same product from abroad is unlimited and amounts to S w at the price P w. In this situation, the domestic production of the good will be Q 1, consumption - Q 3, and the import of the good - Q 3 Q 1 - To support local producers of goods that compete with imports, the government decides to provide them with an internal subsidy. The price of the subsidized product is reduced by the amount of the subsidy, and the direct supply by local producers is moved to the S s level. Domestic production rises to Q 2, and imports shrink to Q 3 Q 2 - With the volume of domestic production Q 2, the producer receives for his product the price P s, which consists of the price paid by the consumer P w and the subsidy received from the government P w P s - The government's expenditure on the subsidy is the product of the amount of the subsidy by the amount of production achieved upon receipt of the subsidy, that is, PPX Q.
In Figure 7.5, the pre-trade and pre-subsidy domestic price is $ 430. After the start of trade at a world price of $ 400 for a product, the country produces 2 units, consumes 14 units, imports 12. After the introduction of a subsidy of $ 25, for each unit, local producers at the same world price are able to produce 7 units of the product, and imports reduced to 7 units.
The protectionist impact of subsidizing local production on imports is clear. The government pays $ 175 from the budget ($ 25 X 7 = $ 175) in subsidies. When receiving a subsidy, the local producer receives $ 400 for each unit of goods, from the buyer, and $ 25 from the government, a total of $ 425. the manufacturer has slightly less income ($ 425) than he received for each unit in the domestic market in the absence of imports ($ 430).
There are two economic effects resulting from the grant. Part of the subsidy falls into the hands of more efficient national producers of this product in the form of a producer surplus - segment a. The protection effect b, which is a direct loss to the economy, arises because inefficient local producers can still sell their goods as a result of the subsidy. Production subsidies
Example 7.6
In Russia, import subsidies were introduced in 1992 as a replacement for the special depreciated exchange rate used to settle accounts with the budget when importing grain, machinery and equipment, spare parts, components for the chemical industry, medicines, baby food and some other key goods. Moreover, part of the import subsidies was not shown in the expenditure side of the state budget. The state sold foreign currency to importers purchasing goods from centralized foreign exchange at an average price of 20% of the market exchange rate, and even 1.6 rubles for machinery and equipment. for the dollar. There were many coefficients for converting contract prices for imported goods into rubles. For example, for granulated sugar it was 20% (i.e. the importer paid so much, the rest was covered by the state), animal oil - 22, children food- 5%. Import subsidies accounted for about 13% of GNP and were a heavy burden on the budget. Over the next years, the Russian government reduced budget subsidies both by reducing the list of goods whose export is subsidized, and by increasing the coefficients. In early 1994, virtually all centralized imports were eliminated, and import subsidies were reduced to 4% of GNP.
Import subsidies, mainly based on differences in official and market exchange rates, existed in 1992-1993. in Belarus. They spent about 3% of the GNP. In Kazakhstan, in 1992, they were carried out, in addition, through a centralized monetary fund. In Lithuania in 1992-1993 energy imports were subsidized. In Ukraine, in the same years, the import of fuel and coal was subsidized for sale to the population.
drivers of goods competing with imports are considered an economically preferred method of restricting imports over an import tariff or quota. In addition to the fact that tariffs and quotas distort domestic prices, they result in the economic effect of consumption discussed above, which is expressed in the loss of excess consumption, which falls entirely on the importing country. The subsidy to producers provides a restriction on imports comparable to the tariff and quota, but at the expense of lower losses for national economy... True, these losses arise not only as a result of the negative effect of protection, but also due to the fact that subsidies are financed from the budget, that is, from taxes.
A specific case of domestic subsidies is import subsidies, which were characteristic of Russia and some other transition economies in the early 1990s. The need to subsidize imports was caused primarily by the abolition of the directively controlled exchange rate of the national currency and the transition to a floating exchange rate. As a result, overvalued exchange rates fell sharply, making imports of many goods that are necessary to maintain economic development countries impossible because they have become too expensive for local buyers. As a result, governments were forced to finance part of imports from the state budget, providing import subsidies to importers (example 7.6).
Often, governments not only subsidize import-competing industries, but also subsidize exporters.
@ Export subsidy is a financial non-tariff method of trade policy that provides for budgetary payments to national exporters, which allows selling goods to foreign buyers at a lower price than on the domestic market, and thereby boosting exports.
Rice. 7.6. Economic effect of export subsidies
Suppose that the supply of goods from abroad (export of goods by a foreign country to a given country) is S w, and demand within a given country is D d (Figure 7.6). In this situation, market equilibrium is achieved at point E - buyers in the importing country will buy Q 1 goods at the price P w. To support exporters, the foreign government decides to grant them an export subsidy. As a result of a decrease in the export price, the supply of goods from abroad increases and the supply curve shifts to the level S s, and the market equilibrium - to point F. B as a result of subsidies, the export price decreases to the level P s, that is, the terms of trade of the exporting state have worsened. Ho due to a decrease in the export price, the number of units of goods that can be exported increases to Q 2. Since, due to the growth of exports, fewer goods enter the domestic market, the domestic price for it increases to P d. The gain or loss of the exporting state directly depends on whether, by increasing the volume of sales, it will be possible to compensate for the losses that have arisen due to the deterioration of the terms of trade, that is, a decrease in the export price. In addition, there are expenses for financing the subsidy itself, which must be borne by the budget, and therefore by the taxpayers, in the amount of the amount of goods exported after the introduction of the subsidy, multiplied by the amount of the subsidy (quadrangle ABFD).
In Figure 7.6, the exporting country sells and the importing country buys 1 million pieces of the product at $ 100 per item. The government of the exporting country decides to help exporters and gives them a subsidy of $ 50 for each exported item. Let us assume that in this case the export price of the goods falls to $ 75, and the export rises to 1.5 million pieces. Prior to the introduction of the subsidy, the exporter received $ 100x 1 = $ 100 million in export earnings. After the introduction of the subsidy - $ 75x 1.5 = 112.5 million dollars, that is, despite the fall in prices, his income increased due to an increase in the volume of exports. But at the same time, the export subsidy cost the budget and taxpayers $ 50x 1.5 = $ 75 million.
The fundamental difference between import tariffs and export subsidies as a means of trade policy is that an import tariff increases the domestic price of imported goods, while an export subsidy increases the domestic price of exports. An import tariff imposed by a large country improves its terms of trade by lowering the price of its imports and increases the relative supply of local goods that compete with imports, while reducing demand for imports. An export subsidy imposed by a large country has the opposite effect: it worsens its terms of trade, increasing the price of its exports, but also increasing the relative supply of exports and reducing domestic demand for exported goods. An import tariff improves a country's terms of trade at the expense of the rest of the world. An export subsidy worsens a country's terms of trade in favor of the rest
Import tariff and export subsidy
TABLE 7.2
| Import tariff | Export subsidy | |
| The relative price of imported goods in the world market | is shrinking | increases |
| The relative price of exported goods in the world market | increases | is shrinking |
| Terms of trade | improve at the expense of other countries | worsen in favor of other countries |
| Domestic price of imported goods | increases (decreases in the case of Metzler's paradox) | remains the same |
| Domestic price of export goods | remains the same | increases (decreases in the case of Metzler's paradox) |
| Domestic demand for export goods | remains the same | going down |
| Domestic demand for imported goods I | going down | remains the same |
the world. Both trade policy instruments distort domestic prices and consumption patterns in the country using them.
However, as with bustling growth, the overuse of import duties and export subsidies can be the opposite. This paradox, which is more a theoretical possibility than an economic reality, was first pointed out by the University of Chicago economist Lloyd Metzler.
@ Metzler paradox - an import tariff can lead to a fall rather than an increase in the domestic price of an imported good in the event of a sharp drop in its relative price on the world market as a result of the tariff. The use of an export subsidy can lead to a fall, rather than an increase in the domestic price of an export product due to an excessive fall in its relative price in the world market.
The differences between import tariffs and export subsidies are summarized in Table 7.2.
Given that an export subsidy is an additional tax burden on taxpayers, its application usually requires legislative approval. Arguments that are usually made to justify export subsidies are CONSTANT that they support employment in exporting industries and improve the balance of payments due to export growth. Export subsidies are considered unfair competition under BTO rules and are prohibited. Given the varied forms that domestic and export subsidies take, it is difficult to pinpoint their exact size. In the early 1980s, the seven largest industrialized countries only issued export subsidies of $ 1.5-3 billion a year. B 1984-1986 domestic subsidies in the United States for milk accounted for 66% of its selling price, in the European Union - 56, in Japan - 82%, for sugar, respectively, 76, 75 and 72%; On average, for eight agricultural products (eggs, milk, poultry, beef, wheat, sugar, rice, soybeans), domestic subsidies were 35% of the market price in the USA, 49 in the European Union and 64% in Japan. Obviously, from an economic point of view, export subsidies are meaningless. Their application is based only on the political calculations of governments. Moreover, the importer, having discovered the fact of export subsidies by the exporter, has the right to introduce countervailing duties. Therefore, export subsidies are often disguised as loans to foreign countries bound by the obligation to purchase goods at their expense only from suppliers from the country that provided them.
Countervailing duty is a specific type of duty that is set on the import of goods if subsidies were used for their manufacture. It is a tool in combating the negative impact on the economy of imported goods that are subsidized directly or indirectly.
She has similar to others customs fees signs, these include:
- Obligation. If the goods imported into the territory of the country are subject to payment of a countervailing duty, then this must be done without fail. At the same time, it is important that there are no violations of constitutional rights and freedom of commercial activity.
- Retribution. It acts as a payment for the right to transport goods across the border of the Russian Federation.
- Irregularity. Payment is charged only when crossing the border.
Application cases
Countervailing duties are applied to goods that are in one way or another subsidized by a foreign state and imported into the territory of the country. Subsidies may concern:
- Financial impact: transfer of funds, provision of benefits, etc.
- Support from the state, regardless of the form, if it is aimed at increasing exports or decreasing imports of a certain category of goods.
- Any government benefits that are financial assistance or government support.
- Subsidies for the release, transportation of goods.
Countervailing duties are used when financial instruments of support from another state are found. But only if the import of such goods is fraught with economic damage to domestic producers.
Rules and calculations
There are such rules:
- The rates and specifics of the calculation are determined by the government of the Russian Federation.
- The duty is formed for the period of validity of the manufacturer's subsidies by a foreign state in any form.
- The rate is formed on the basis of the size of the subsidy and cannot be higher than it.
- The terms of action are determined by the decision of the Government. They can vary for the period necessary to neutralize damage or eliminate the consequences for the country's economy.
- Before introducing compensation fees, a thorough investigation by the Ministry of Economic Development and Trade is carried out to determine the impact on the country's economy of the import of certain goods.
Purpose of application
Countervailing duties are a type of special that helps protect domestic markets. There is no objective here to benefit the country, that is, they are not a fiscal measure. Therefore, sometimes the rates of such payments may be lower than the subsidies from a foreign government. Moreover, they are sufficient to eliminate / eliminate damage to the economy.
Most often they are considered as penalties and defenses, which makes them significantly different from other regulatory instruments. They have great practical significance as a neutralizing measure.
