Institutional Aspects of Tariffs Flashcards
What is special tariff?
A certain amount for each unit of import
What is ad valorem tariff?
A certain percentage of import value
Why is ad valorem tariff more transparent than special tariff?
Because of exchange rates between two currencies
What is alternative (mixed) tariff?
A combination of specific and ad valorem tariff (e.g., the lower of the two)
What is variable levy?
The amount of tariff equal to the target domestic price - international price
=> to stabilize the domestice price level
What is bound tariff rate?
GATT Article II
The government promises not to raise the tariff higher than a certain tariff rate
Tariff binding: the behavior
What is mfn tariff rate?
Most-favored-nation tariff rate
=> equal treatment of imported products regardless of the exporters
Principle of non-discrimination: mfn and national treatment
Benefit for WTO members
What is the exception to the mfn?
Preferential tariff rate provided to certain exporters (in REI)
