Chapter 6 - Business-government trade relations

free trade

pattern of imports and exports that occurs in the absence of trade barriers

subsidy

financial assistance to domestic producers in the form of cash payments, low-interest loans, tax breaks, product price supports, or other forms

foreign trade zones

designated geographic region through which merchandise is allowed to pass with lower customs duties and/or fewer customs procedures

tariff

government tax levied on a product as it enters or leaves a country

ad valorem tariff

tariff levied as a percentage of the stated price of an imported product

specific tariff

tariff levied as a specific fee for each unit of an imported product

compound tariff

tariff levied on an imported product and calculated partly as a percentage of its stated price and partly as a specific fee for each unit

quota

restriction on the amount of good that can enter or leave a country during a certain period of time

voluntary export restraint

unique version of export quota that a nation imposes on it exports, usually at the request of an importing nation

tariff-quota

lower tariff rate for a certain quantity of imports and a higher rate for quantities that exceed the quota

embargo

complete ban on trade in one or more products with a particular country

administrative delays

regulatory controls or bureaucratic rules designed to impair the flow of imports into a country

currency controls

restrictions on the convertibility of a currency into other currencies

normal trade relations

requirement that WTO members extend the same favorable terms of trade to all members that they extend to any single member

dumping

exporting a product at a price either lower than the price that the product normally commands in its domestic market or lower than the cost of production

anti-dumping duty

additional tariff placed on an imported product that a nation believes is being dumped on its market

countervailing duty

additional tariff placed on an imported product that a nation believes is receiving an unfair subsidy