8th – Other Trade Policies

*UNCTAD (United Nations Conference on Tariffs and Development) has encourage

free trade and provided the rules of free trade practices.
Here are the trade policies which influence exports:
1. Export Policies
a. Export Subsidies
- Granted to a company for its export activities or to foreign consumers of export
in order to encourage export sales.
- A subsidized export credit is intended to increase sales of exports.
b. Export Restrictions
- Contrary to promotion of exports but controls the flows of exports to other
countries have economic validity.

2. Domestic Policies
a. Domestic Subsidies
- Granted to local producers in the form of tax exemption and/or financial and
technical assistance.
- This cut down the cost of production and improves the competitive position of
domestic products against foreign products
b. Domestic Tax Structures
- Direct Tax. Imposed on individual and corporate incomes
- Indirect Tax. Taxes on sales.
- There are provisions in the GATT that allow destination principle border tax
adjustments.

3. Retaliatory Trade Policies

a. Escape Clause Action
- If the increase in imports constitute a substantial damage to their operation. A
subsidized export credit is intended to increase sales of exports.
b. Countervailing Duties
- Imposition of exports subsidies increases exports.
c. Anti-Dumping Duties
- Sometimes foreign exporters are accused of predatory dumping which means
foreign producers sell their products much lower prices than export markets.