The Ministry of Energy proposed to begin subsidizing gasoline prices ahead of schedule

The agency proposes to provide subsidies to oil workers three months earlier - from October 2018. Due to expensive oil and the weak ruble, companies are losing more and more on the domestic market; this measure will allow them to return 100 billion rubles.

Early support

The Ministry of Energy proposed that the government begin subsidizing gasoline prices not from January 2019, but from October 2018. Two sources close to the government and one of the relevant ministries told RBC about this, and it was confirmed by a federal official.

We are talking about introducing a so-called damping surcharge; it will allow oil companies to receive from the budget half of the additional revenue that they could earn by exporting gasoline, rather than supplying it to Russian consumers at lower prices. Now, by agreement with the government, they are forced to keep prices at the level of the end of May 2018.

Over three months, the total losses of oil workers from maintaining low prices in the current environment will amount to 165 billion rubles, calculated Sergei Yezhov, chief economist at Vygon Consulting. But if the government introduces a subsidy from October 1 and compensates them for 60% of this lost revenue (this level of compensation was expected from 2019, subsequently - 50%), they will be able to return about 100 billion rubles, he added. At current oil prices, the subsidy for oil workers in 2019 could amount to 400 billion rubles, Alexey Sazanov, head of the tax department of the Ministry of Finance, said in an interview with Reuters on September 4.

Recount of officials

In the spring, the government planned that the subsidy in the form of a damper would appear only in 2019 and would help curb the rise in gasoline prices that could occur due to an increase in excise taxes and VAT. But since then, macro conditions have changed significantly, officials have re-calculated everything and realized that measures need to be taken earlier, explains one of RBC’s interlocutors. The damper was calculated based on $60 per barrel of Brent oil and 58.5 rubles. per dollar: they thought that oil prices would fall by the end of the year, says a federal official.

However, oil prices not only did not fall, but continued to rise: since August, when the law on tax maneuver in the oil sector (including subsidies for oil workers) was signed, Brent rose in price by almost 10%, to $80 per barrel, recalls Raiffeisenbank analyst Andrey Polishchuk. The main pressure factor is the weakening ruble, adds Yezhov. Since August, the ruble has fallen in price by 11%, to 69.97 rubles. for a dollar.

Despite the increase in netback (export price minus transportation costs and duties), oil companies continue to restrain the rise in prices for petroleum products at retail, Alexander Dyukov, Chairman of the Board of Gazprom Neft, said in an interview with RBC TV channel. From June 1 to September 7, retail prices for AI-92 in the Central Federal District even decreased by 56 kopecks, to 41.35 rubles. per liter, and the export alternative for the Moscow region, on the contrary, increased by 7%, to 61.86 thousand rubles. per ton (45.5 rubles per liter - RBC), confirms Reuters analyst Maxim Nazarov. “There is practically no profitability at gas stations, the economy is near zero. This is an unhealthy situation; in the long term, this could lead to a certain shortage of petroleum products,” Dyukov warned.

The government has agreed with the oil industry that it will allow them to slowly lower gasoline prices in the fall: it is impossible to keep them forever, explains a source close to the government. The introduction of subsidies in October will help avoid too sharp increases in prices at gas stations, he explains the position of the Ministry of Energy.

From October 1, the use of a damping component is impossible; these costs are not included in the budget law, a representative of the Ministry of Finance told RBC. Previously, Alexey Sazanov said that the subsidy is financed by additional oil and gas revenues, which are now used to purchase foreign currency and are credited to the National Welfare Fund. Therefore, this measure does not affect budget expenditure obligations in any way, the official pointed out.

So far, no decision has been made on the early introduction of a damping surcharge, Ilya Dzhus, a representative of Deputy Prime Minister Dmitry Kozak (supervises the fuel and energy complex), told RBC. But the government is constantly monitoring the situation and has an arsenal of all the necessary tools to stabilize retail prices if the situation begins to change dramatically, he emphasizes.

Representatives of the Ministry of Energy, Rosneft, LUKOIL, Gazprom Neft, Surgutneftegaz and Tatneft have not yet responded to RBC’s requests.

The next popular protective measure is compensatory (anti-subsidy) measures. Governments use subsidies to achieve various trade and policy goals, in particular to promote domestic products into foreign markets. Such subsidies often make it possible to gain significant competitive advantages over producers in the importing country, occupy a significant market share, or completely displace national producers.

Subsidies are divided into prohibited and permitted. Go to category prohibited These include subsidies that are provided by the state only if the exporter fulfills the export quota established by the state or uses only domestically produced products and not imported goods. Subsidies of this kind are prohibited because they are blatantly intended to distort the natural mechanism of competition in international trade and may harm the commercial interests of other countries.

All other subsidies are permitted. These subsidies, in turn, are divided into two categories: punishable and non-punishable. They are distinguished according to two criteria:

1) the specific nature of the subsidy;

2) causing damage to the economic interests of another country.

In case of proof of material damage specific subsidies Countervailing duties may also be imposed.

With a few exceptions, all permitted subsidies that are not specific are not punishable. In particular, subsidy programs based on objective economic criteria and applied horizontally, i.e., “not giving an advantage to certain enterprises over others,” are not specific, and therefore they are not punishable.

Thus, subsidies provided by governments to small and medium-sized enterprises in accordance with established parameters of the size of such enterprises or the number of employees are usually not punishable.

As for the procedures for introducing countervailing measures, they are in many ways similar to the procedures for anti-dumping investigations.

Financing of exports can be carried out both from government sources at the expense of the state budget, and at the expense of various government-related institutions (banks, funds, etc.), as well as at the expense of the private sector - the exporters themselves and the banks that serve them. Export financing as a method of trade policy should be distinguished from routine financing and lending of export-import transactions, which are simply the provision of working capital by banks for specific commercial transactions. Financing as a trade policy method discriminates against foreign companies in favor of national producers and exporters. The most common financial methods of trade policy are subsidies, lending and dumping.

If the government considers it necessary to stimulate the export of national producers, then it can provide them with subsidies from the budget in one form or another.

Based on the nature of payments, subsidies are divided into:

· straight - direct payments to the exporter after he has completed an export operation in the amount of the difference between his costs and the income he receives. Direct subsidies are subsidies to the manufacturer when it enters the foreign market. Since the early 60s, the subject of direct subsidies has been expensive industrial exports of developed countries - ships, aircraft, etc. However, direct subsidies are prohibited by WTO rules and their use is too obvious for trading partners, who may use retaliatory measures;

· indirect - hidden subsidies to exporters through the provision of tax benefits, preferential insurance conditions, loans at a rate below the market rate, refund 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- the most disguised financial method of trade policy and discrimination against imports, providing for budgetary financing of domestic production of goods that compete with imported ones. Subsidies to producers of import-competing goods are considered an economically superior method of restricting imports compared to an import tariff or quota. A producer subsidy provides an import restriction comparable to a tariff and quota, but at the cost of less damage to the national economy. Often governments not only subsidize import-competing industries, but also provide subsidies to exporters.

· Export subsidy- a financial non-tariff method of trade policy that provides for budget payments to national exporters, which allows them to sell goods to foreign buyers at a lower price than on the domestic market, thereby boosting exports. The fundamental difference between an import tariff and an export subsidy 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 exported goods. 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 import-competing goods while reducing the 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 to the benefit of the rest of the world. Both trade policy instruments have a distorting effect on domestic prices and consumption patterns in the country using them. Export subsidies are considered unfair competition under WTO rules and are prohibited. Often hidden subsidies for exports are carried out through export credits.

Export credit- a method of financial non-tariff foreign trade policy, which provides for financial incentives by the state for the development of exports by national firms. Export credit can take the form of:

· subsidized loans to national exporters - loans issued by state banks at an interest rate below the market rate;

· government loans to foreign importers subject to the obligatory condition of purchasing goods only from firms in the country that provided such a loan (tied loan);

· insurance of export risks of national exporters which include commercial risks (the importer's inability to pay for the shipment) and political risks (unexpected government actions that prevent the importer from fulfilling its obligations to the exporter).

Export credits are:

· short-term - for a period of up to 1 year, used to finance the export of consumer goods and raw materials;

· medium term - for a period of 1 to 5 years, used to finance the export of machinery and equipment;

· long-term - for a period of more than 5 years, used to finance the export of investment goods and large projects.

Subsidizing exports in order to boost them in the face of intensified competition can take extreme forms aimed at suppressing competitors and pushing them out of the market.

Protective measures

Among other non-tariff regulation measures, one can distinguish the category of measures related to the implementation of customs or administrative formalities, as well as currency control.

These include:

1) import taxes(NO import duties);

Border tax, which is imposed on goods for crossing the border;

Fees associated with paperwork at customs, customs inspection of goods, checking their quality;

Other fees (port, statistical, phytosanitary, etc.);

2) import deposits– represent a cash deposit for the payment of customs duties that the importer must deposit in local or foreign currency to an authorized bank before purchasing foreign goods. The amount of the import deposit is established in the form of a certain ratio to the cost of the imported goods;

3) currency restrictions and exchange controls– this is the regulation of transactions of residents and non-residents with currency and other currency values;

4) regulation of the national currency exchange rate;

5) measures of state regulation of foreign trade:

Creation of export credit agencies;

Functioning of the system of guarantees and insurance of export credits;

Agreement on Subsidies and Compensatory Measures

(Agreement on Subsidies and Countervailing Measures)

The Agreement applies to subsidies provided by a WTO member country represented by its government or public authorities (hereinafter referred to as the state).

The purpose of the Agreement is not to unduly restrict the right of a WTO member government to provide subsidies to domestic businesses and organizations, but to prohibit or prevent the government from using subsidies that adversely affect the trade of other countries.

A subsidy occurs when two conditions are met:

1) the state takes measures:

For financial assistance in the form of:

· direct transfers of funds (including grants, loans, purchase of shares) or obligations to transfer them (including loan guarantees);
· refusal to collect or not to collect payments received by the state (including in the form of providing tax benefits);
· preferential or free provision by the state of goods or services, with the exception of goods or services intended for the maintenance and development of general infrastructure, or preferential purchase of goods or services;
· making payments to the financing mechanism;

To maintain income or prices in any form, when the direct or indirect result is an increase in the export of any type of product from the territory of this state or a reduction in the import of this type of product into the territory of this state;

2) as a result, some benefit is obtained.

The benefit provision is fundamental in determining whether a particular measure constitutes a subsidy or not. In general, any government action to provide financial assistance that is inconsistent with commercial considerations can be considered to provide a benefit.

A fundamentally new point is the concept of specificity of subsidies. The subsidy is specific if:

It is provided to a specific enterprise or a specific sector of the economy or a specific group of enterprises or industries (hereinafter referred to as specific enterprises);
And
- the body providing the subsidy, or the legislation under which this body operates, clearly limits access to the subsidy to certain enterprises only.

The Agreement includes a provision that is important for resolving issues related to the creation of special economic zones, economic development zones, etc. on the territory of a WTO member country: a subsidy is considered specific when access to it is limited for certain enterprises located in a specific area. a designated geographic region that is under the jurisdiction of the subsidizing authority.

It should be noted that any export or import substitution subsidy is specific.

A subsidy is not specific where objective criteria or conditions are established that determine the right to receive a subsidy and its amount, while the said right must be automatic, and the objective criteria and conditions are strictly observed. Criteria or conditions are considered objective if they:

They are neutral;
- do not create advantages for certain enterprises over others;
- are of an economic nature;
- are horizontal according to the method of application.

For example, such criteria and conditions may include the number of employees or the volume of production of the enterprise. It should be noted that such objective criteria or conditions must be formulated in the relevant law, regulation or other official document in such a way as to ensure that they can be verified.

The agreement establishes two categories of subsidies: prohibited and permitted subsidies.

Prohibited Subsidies

Subsidies that are prohibited in WTO member countries include:

Export subsidies, i.e. subsidies, the provision of which is linked to export supplies. Among them:
· direct subsidization of export supplies;
· provision of subsidized production factors for the production of export products;
· full or partial exemption of exporting enterprises from paying direct taxes on export supplies;
· implementing government programs to guarantee and insure export credits using premium rates that are insufficient to cover the long-term operating costs and losses of these programs;
· provision of export loans at lower rates compared to the rates of commercial credit institutions, etc.

An illustrative list of export subsidies is given in Annex I to the Agreement;

Import substitution subsidies, i.e. subsidies aimed at encouraging the use of domestically produced goods instead of imported goods.

Any prohibited subsidy is considered to be specific.

To offset the impact of prohibited subsidies, the affected WTO Member may, following an investigation, impose countervailing duties or resort to the WTO dispute settlement system.

Permitted subsidies

All other subsidies are permitted, which are divided into two groups:

Subsidies that give rise to investigations (“yellow” subsidies). Such subsidies include specific subsidies that have an adverse effect on the interests of other WTO member countries in the form of:
· causing material damage to the economic sector of an importing country - a WTO member, which may be the basis for that country to conduct an appropriate investigation with a view to introducing a countervailing duty on subsidized imports;
· cancellation or reduction of benefits received directly or indirectly by other WTO member countries under GATT 1994, in particular, benefits from tariff concessions enshrined in national lists of concessions;
· causing or threatening to cause serious damage to the interests of another WTO member country. Serious damage is considered to exist if:
if the total level of subsidies for the imported product exceeds 5% of the cost;
providing subsidies to cover losses from core activities incurred by the economic sector;
providing subsidies to cover operating losses incurred by the enterprise, and these subsidies should not represent one-time measures that are one-time and cannot be repeated for a given enterprise and which are taken only to give time for the implementation of long-term solutions and to avoid acute social problems;
direct debt write-off to the state and government subsidies for debt repayment.

The affected WTO Member may impose countervailing duties following the investigation or resort to WTO dispute settlement procedures;

Subsidies that do not provide grounds for investigation. Such subsidies include all subsidies that are not specific, as well as some specific subsidies.
It should be noted that the provisions of the Agreement on subsidies that do not give rise to investigations were no longer in force as of January 1, 2000.
Compensatory measures can only be taken following an investigation by the relevant authorities of the importing country.

Initiating an investigation

The investigation is carried out upon a written request from or on behalf of the importing country's industry (similar to the way it is carried out in the case of an anti-dumping investigation).

The application must provide sufficient evidence of the existence of:

Subsidies and, if possible, their amounts;
- material damage, which means damage to a sector of the economy of the importing country or the threat of causing such damage or a significant delay in the development of such a sector of the economy;
- a cause-and-effect relationship between subsidized imports and the expected damage.

However, under special circumstances, the decision to initiate an investigation may be made by the relevant authorities of the importing WTO member country without receiving an application from or on behalf of the domestic economic sector. To do this, the authority must have evidence of the existence of the subsidy, the damage and the causal relationship between them sufficient to justify the initiation of an investigation.

Conducting an investigation

It should be noted that the investigation is immediately terminated when:

The amount of the subsidy is minimal (de minimis) and amounts to less than 1% of the cost;
or
- the volume of subsidized imports or material damage is insignificant.

The determination of property damage must be based on direct evidence and include an objective investigation of:

The volume of subsidized imports and its impact on prices in the domestic market of the importing country for types of products similar to subsidized ones;
or
- the consequences of such imports for producers of similar types of products in the importing country.

The procedure for participation in the investigation of exporters and other interested parties, the timing of investigations - as in the case of anti-dumping investigations.

Voluntary Commitments

An investigation may be suspended or terminated without the imposition of countervailing measures (temporary measures or countervailing duties) if voluntary commitments are obtained to the satisfaction of the country conducting the investigation:

From the government of the exporting WTO member country: on the elimination or limitation of a subsidy or on the adoption of other measures regarding the consequences of the provision of subsidies;
or
- from the exporter: agreement to revise its prices in such a way as to eliminate the adverse consequences of the subsidy.

Compensatory measures

Based on the results of the investigation, the investigation authorities of the importing country decide to introduce the following compensatory measures:

Temporary measures in the form of temporary countervailing duties, guaranteed by cash deposits or pledges in an amount equal to the pre-calculated subsidy amount. Temporary measures are being introduced to prevent material damage that may be caused by subsidized imports while the investigation is underway.
The period for which temporary measures are introduced does not exceed 4 months;

Countervailing duties.
The decision on the introduction and amount of a countervailing duty is made by the authorities of the importing WTO member country.
A countervailing duty imposed on a type of product is imposed on a non-discriminatory basis on imports of that type of product from all sources for which an investigation has established that these sources have benefited from subsidies, resulting in material damage; however, imports from each source are subject to an individual countervailing duty.
The amount of countervailing duty levied on a subsidized imported product must not exceed the established amount of the subsidy per unit of subsidized and exported product.
The period for which the countervailing duty is imposed and its amount are determined by the need to counteract subsidies that cause harm. The duty cannot be introduced for a period exceeding five years from the date of its introduction. But this period may be revised upward by the investigation authorities of the importing country if there are objective grounds for this.

The rate of temporary and countervailing duties are added to the rates of customs duties applied in the importing country to goods that are similar to the subsidized goods.

Temporary measures and countervailing duties apply only to those products that are supplied for domestic consumption in the importing country after the relevant decisions imposing such measures or duties have entered into force.

With regard to the provisions of the Agreements relating to information about the investigation and the possibility of urgent consideration of administrative actions associated with the adoption of final decisions on the results of countervailing investigations, they are similar to the same provisions of the Agreement implementing Article VI of the GATT 1994 (Anti-Dumping Code).

The Agreement contains provisions for special and differential treatment for developing countries - members of the WTO.

Disputes between WTO Members arising in connection with the provision of subsidies are dealt with in accordance with the provisions of the Understanding on Rules and Procedures Governing Dispute Resolution, taking into account the special and additional rules and procedures provided for in the Agreement.

To protect national producers, the state can not only limit imports, but also encourage exports. One form of stimulating domestic export industries is export subsidies, that is, financial benefits provided by the state to exporters to expand the export of goods abroad. As a result of such subsidies, exporters are able to sell goods on the foreign market at a lower price than on the domestic market. Export subsidies can be direct (payment of subsidies to a manufacturer when it enters a foreign market) and indirect (through preferential taxation, lending, insurance, etc.).

The effects of providing an export subsidy are shown in Figure 4.3. Manufacturers receiving subsidies find it more profitable to export than to sell goods on the domestic market. But in order to expand supplies to the foreign market, they must reduce export prices. The subsidy covers losses from price reductions, and export volumes grow. At the same time, since due to the growth of exports less goods enter the domestic market, the domestic 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 suffer 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 that 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 will increase by the entire amount of the subsidy (which is possible with an infinitely large elasticity of demand for imports on the world market), government costs will be equal (b + c + d + e + f), which means that the loss of welfare of the country as a whole will be in the area (b + f). However, in reality these losses will be even greater. The elasticity of demand for imports in importing countries is obviously not infinitely large, so domestic prices in the exporting country will increase by less than the subsidy provided, and therefore the budgetary cost will be greater than the area of ​​the rectangle (b + c + d + e +f)

Figure 4.3

In accordance with GATT/WTO rules, the use of export subsidies is prohibited. If they are used, importing countries are allowed to retaliate by levying countervailing import duties.

EXPORT SUBSIDY

EXPORT SUBSIDY

(export subsidy) An export subsidy that makes the unit price received by producers of exported goods higher than the price paid by foreign buyers. Direct export subsidies are prohibited by international agreements, but many other government measures with similar effects have become very widespread. Exporters may receive a refund of customs duties they have paid on inputs, be provided with subsidized loans, be given preferential access to conventional credit, or be helped to finance their capital or training costs.

In countries where exchange controls or direct import controls exist, exporters may enjoy an advantage in acquiring scarce materials or foreign exchange. Firms that must compete with foreign producers suspected of receiving export subsidies often seek the imposition of countervailing import duties designed to offset the effect of such subsidies. Economy. Dictionary. - M.: "INFRA-M", Publishing House "Ves Mir".. 2000 .

EXPORT SUBSIDY

J. Black. General editor: Doctor of Economics Osadchaya I.M.

one of the ways of government stimulation of exports at the expense of the budget. Such subsidies are possible in the form of direct financing of research and development work and export production, as well as by providing favorable loans for the same purposes.. Raizberg B.A., Lozovsky L.Sh., Starodubtseva E.B.. 1999 .

Modern economic dictionary. - 2nd ed., rev. M.: INFRA-M. 479 pp.. 2000 .

Economic dictionary

See what "EXPORT SUBSIDY" is in other dictionaries: A subsidy to the manufacturer or seller of an export product that reimburses part of the production or distribution costs in order to increase the competitiveness of the product in the foreign market. Providing export subsidies is a way of state... ...

Financial Dictionary A subsidy to the manufacturer or seller of an export product that reimburses part of the production or distribution costs in order to increase the competitiveness of the product in the foreign market. Dictionary of business terms. Akademik.ru. 2001...

Export subsidy Dictionary of business terms

Encyclopedia of Law

Export subsidy- (English export subsidy) one of the ways of government stimulation of exports at the expense of budget sources. Such subsidies are possible in the form of direct financing of research and development work and export production... Large legal dictionary

Export subsidy- EXPORT SUBSIDY Direct cash payments, tax breaks or preferential loans provided by the government to domestic producers in order to reduce export prices. Although the widespread use of government subsidies does... Dictionary-reference book on economics

EXPORT SUBSIDY- (PREMISE) financial incentives (benefits) by government bodies of national exporters of goods and services abroad, provided on the territory of the country of the exporter (manufacturer) in any form provided for by the General Agreement on Tariffs and... ... Financial and credit encyclopedic dictionary

export subsidy- one of the ways of government stimulation of exports at the expense of the budget. Such subsidies are possible in the form of direct financing of research and development work and export production, as well as through... ... Dictionary of economic terms

Subsidy- (Grants) Benefit in cash or in kind Benefit provided at the expense of the state or local budget, as well as special funds to legal entities and individuals Contents Contents Definition Accounting for government subsidies... ... Investor Encyclopedia

- (see EXPORT SUBSIDY) ... Encyclopedic Dictionary of Economics and Law

Export subsidy

The second option for foreign trade policy concerns export promotion. In order for national manufacturers to be able to increase production and supplies abroad, they must have significant competitive advantages. One of these competitive advantages is low costs. The state can provide support to national manufacturers-exporters by providing companies export subsidies. Export subsidies can take the form of direct cash investments by the state in a national exporting company, providing such firms with deferred payments for export supplies (for example, tax credits), and paying part of the costs associated with exports.

In Fig. 15.17 shows the impact of an export subsidy on the national economy of the exporting country.

Let us assume that domestic supply and demand are represented by a free market, without government intervention. Lines y n B characterize domestic demand and domestic supply of a product. Let the world price RT established at a level exceeding the domestic equilibrium price. In a free market, national producers will prefer to sell part of their output not on the domestic market, but on the world market. Exports before the subsidy will be ^ = 0_3 - 0_2.

Rice. 15.17.

Let the government now decide to subsidize national exporters by providing companies with a subsidy of i per unit of export. Now part of the export is paid for by the state itself. Therefore, the real price for the exporter will increase to the value Р№ + 5. But since the goods sold are the same, whether we are talking about the world or the domestic market, the final price on the domestic market will be equal to the new level.

Export after the introduction of subsidies X2 = 04-0.1.

The change in social welfare under the influence of an export subsidy will consist of the following components.

The area of ​​triangle A is the net loss due to the reduction in domestic consumption under the influence of a higher real price, since MV > MS = P™, the marginal value of the product for the domestic consumer will now be higher than its marginal cost of production, which is equal to the world price.

Area of ​​a triangle IN represents a net loss to the economy due to support for inefficient domestic production, since MV™ =< МС, the marginal value of an exported good to international consumers (equal to the original world price) will be lower than the marginal cost of its production in a given country.

In general, the value A + B characterizes the net welfare loss from a subsidy. Thus, an export subsidy leads to a deterioration in the welfare of the national economy, although it benefits exporting companies.

Foreign trade policy instruments

• Customs duties.
• Export subsidies.
• Import quotas.
• Voluntary import restrictions.
• Legislative norms:
  • - sanitary control;
  • - emissions of harmful substances;
  • - content of toxic substances in paint, toys, etc.
• National public procurement.
• Bureaucratic barriers.
• Additional terms and conditions for direct investment.

Import quotas

Import restrictions can be achieved not only through customs duties, but also through

introduction of quotas on sales volumes of importing firms. Pricing methods, which include import duties, cannot always effectively limit import sales, since although under the influence of duties the price of foreign goods in the domestic market increases, there may be a sufficient number of solvent consumers in the country who want to purchase the imported product rather than its domestic substitute. Quotas on the volume of foreign supplies are more effective in this regard. If the state decides that the country needs no more than, say, 100 thousand units per year. imported products, then whatever the price, foreign firms will not be able to sell more volume than is determined by quotas. Quotas also have a drawback: quotas, unlike duties, do not generate income for the state budget.