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Presentation made byPresentation made by

Julia Rogozina

PRINCIPAL VIEWS PRINCIPAL VIEWS ON REGULATION ON REGULATION AND CONTROL IN AND CONTROL IN FOREIGN TRADE FOREIGN TRADE

ACTIVITIES SPHEREACTIVITIES SPHERE

Methods of the state regulationMethods of the state regulation in the foreign trade activitiesin the foreign trade activities::

Tariff methods – are based on

customs duties usage

non tariff – all other methods

quantitative methods

methods of the latent

protectionism

Separate tools of state regulation in foreign trade activities are more often applied if it is necessary either to limit import, or to

force export.

Administrative Administrative methodsmethods Administrative methods of regulation -

the system of law-organizational and special measures:

•quantitative restrictions,

•distribution of quotas and licenses,

•the export control concerning certain kinds of the goods,

•an establishment of the state monopoly

for export and (or) import of separate kinds of goods.

The international trading The international trading contractscontracts

The international trading contracts define the general ways of development of the economic

relations between the states, establish the trade and the economic, political mode of the interaction, provide conditions of the mutual calculations,

cooperation terms etc. Long-term agreements-5-10 and more years - about trade and other forms of interaction can be fixed in the contracts. And also

the conclusion of annual reports on the mutual deliveries of the goods practises. The agreements

and reports, supplementing each other, promote the development of the steady mutually advantageous

cooperation.

Customs formalitiesCustoms formalities

There is the customs code in their basis, confirmed by a legislature. The

customs code is created according to a customs policy of the state. It defines the general problems and functions of customs bodies, an order of working out, the statement and use of tariffs, conditions of clearing of payment of duties, sanctions for infringement of

customs rules, a grievance procedure. Customs formalities are one of the most

effective methods of regulation of foreign trade activities.

Contingentiring and licensingContingentiring and licensing

Contingentiring export and import are the quantitative

or cost restrictions of the export and the import,

entered on a certain term on the separate goods

and services, the countries and

groups of the countries.

Licensing is a system of Written permissions given out by state structures for

export and import of the goods. Licensing is applied for the certain periods of time on the

separate goods included in the list of production of nation-wide appointment.

General licences Single licences

Antidumping Antidumping proceduresprocedures

represent judicial and administrative trials of claims, which are shown by national businessmen against foreign suppliers, accusing them of sale of the goods for

undercharges, which can cause a damage to local manufacturers of similar

production. Authorities, courts are obliged to suspend movement of the goods

accused of a dumping, and to understand on the substance of claims.

Price preferencesPrice preferences

Price preferences are established in a legislative order by some countries by definition of the

minimum difference in the prices on which the goods and services of the importer should be below

the prices of national manufacturers.

Technical proceduresTechnical proceduresare established in a legislative order by the state

organisations and represent a complex of actions for checking of conformity of imported production to

requirements of the international and national standards, branch norms and technical instructions.

One of technical barriersOne of technical barriers is the requirement of certification of the

production, the goods imported into the country, for putting them on trial

in specialised laboratories on conformity of their properties to requirements of standards on

technical, sanitary, technological, traditional indicators.

Import proceduresImport procedures

Represent rules of carrying out the import operations at the state

purchases. In many countries the buyer should hold the international auctions for the purpose of finding-out of the most favourable seller.

Sometimes the licence is given to the buyer only in that case, if it has

fulfilled requirements on realisation of counter export operations.

Operative regulation of foreign Operative regulation of foreign trade activitiestrade activities

The government, the Ministry of external economic relations, the State customs committee can suspend operations of participants of foreign trade activities in case of statement of substandard production and the

goods, defaults of obligatory export deliveries at simultaneous export of the similar goods to other

forms, export under unreasonably low prices or import on overcharges, false information messages in

advertising, the customs, currency-financial and registration documentation. The suspension of the

external economic operations is applied both to domestic subjects of foreign trade activities, and to

foreign, admitted legislation infringements.

While the countries win from the free international trade, the separate branches and groups of

resource suppliers can appear among victims. It is easy to understand, why the groups of the businessmen occupied with corresponding

manufacture, are trying to keep or improve the economic positions, convincing the government to enter tariffs or quotas for their protection against

harmful influence of free trade. The effect of special interests or the concept about the behavior

caused "a pursuit of the rent", - plays the important role.

Why are duties and quotas Why are duties and quotas applied in world practice, if applied in world practice, if

it is known, what they it is known, what they interfere with free trade interfere with free trade

and thus reduce economic and thus reduce economic efficiency?efficiency?

Tariff regulationTariff regulation

Tariff regulationTariff regulation is the form of state regulation of the foreign trade activities, applied with a view of import and export

regulation, with which help the state realises the exclusive right to customs duties establishment to the goods moved

through customs border of the Russian Federation.

The main toolThe main tool in foreign trade regulation is the usage of tariff regulation.

Customs dutiesCustoms duties are the most widespread tools of state regulation in the foreign trade, operating through the

pricing mechanism.

There are two basic functions of custom duties.

Additional functions Additional functions of of customcustomss dutiesduties

Promote the developmentPromote the development of national of national manufacture and export to a certain manufacture and export to a certain

degreedegree. .

The customs duties in some cases can be The customs duties in some cases can be used for used for development of national exportdevelopment of national export by an unilateral establishment low and by an unilateral establishment low and

even zero rates, concerning the separate even zero rates, concerning the separate goods, that are necessary for goods, that are necessary for

manufacturing of export production.manufacturing of export production.

Customs-tariff measuresCustoms-tariff measures

-are the set of the organizational, economic, legal actions, carried out

in the order, established by the legislation of the state structures and directed on the regulation of the foreign trade activity sphere.

On the customs-tariff regulation it is based the customs duties

application.

The customs duties application represents the rate list of the customs duties applied to the goods,

imported on the customs territory of the country (import customs duties) or taken out with it (export customs duties). The Customs duties application of the Russian Federation is systematized according to the Commodity nomenclature of foreign trade

activities, based on the Harmonized system of the description and coding of the goods, operating on

the basis of the international Convention since 1988.

The customs duties application - the important tool of a commercial policy and the state regulation of the internal market of the country at its interaction

with a foreign market.

There are various kinds of classification of the customs duties. The most widespread that is

based on taxation - are allocated import, export, transit; on a way of collection - advalorous (it is raised in percentage of

customs cost of the goods), specific (are raised in monetary units from certain quantity of the goods), combined (thus the duty pays off on

advalorous and the specific rate, and that from two rates which gives the largest sum of the

duty is applied).

The classification of the customs The classification of the customs duties. duties.

Non tariff barriersNon tariff barriers

- licensing system, creation of the unjustified quality - licensing system, creation of the unjustified quality standards of production and its safety or simply standards of production and its safety or simply

bureaucratic interdictions in customs procedures.bureaucratic interdictions in customs procedures.

With the usage of administrative (non tariff) barriers the market mechanism is broken, the

assortment of the goods reduces, access possibilities to resources, and actually the

choice of production or resources determines by the consumer in favour of the domestic in

violent way.

The classifications of non tariff barriers are allocated among the international organizations: The UNCTAD and the United Nations.

In the most general view it is possible to allocate following groups among not tariff methods:

# the measures of direct restriction connected with the quantitative control, including following tools: quoting,

quantitative restrictions, licensing, agreements on voluntary restrictions of export, antidumping duties, countervailing duties

and gathering; # the measures of indirect restriction having non quantitative

character among which it is possible to allocate two ways (direction) of influence:

• the set of measures of the foreign trade relations not directed on any restrictions, but their presence and action actually leads

to it;• the set of the financial measures regulating import-export

streams.

Non tariff barriers: the classifications.Non tariff barriers: the classifications.

The special place among non tariff methods is occupied by paratariff barriers. Paratariff barriers - a version of non tariff barriers, which increase cost of the imported goods over the

customs duties (by certain percent or on certain size on a commodity unit) concern the given category of trading barriers: 1.The internal taxes and tax collections with which the imported goods are assessed (in the Russian Federation the value-added

tax);2.the various customs charges which do not have internal

analogue (including gathering for customs registration, storage, customs support, and also an admission fee on import vehicles

and other gathering), special taxes, the additional duties entered with a view of improvement of a financial position of the state or

protection of national manufacture;3.the customs estimation - an establishment of customs cost of

the certain goods applied to calculation of the customs duties and gathering, administratively.

Paratariff barriers Paratariff barriers

The World Trade Organization (WTO) aspires to limit as much as possible the usage of the non tariff barriers in the

world trade. According to the item 111 of the General agreement under tariffs and trade: the taxation of the

imported goods should be carried out on the terms of a national treatment. According to item XIII of the General

agreement under tariffs and trade, the rules of the customs registration should not complicate foreign trade.

It is recommended to prefer financial measures if it’s needed to use the non tariff barriers GATT/WTO.

The tariff and non tariff methods of regulation make the basis of a protectionist policy of the state.

The WTO views on the The WTO views on the barriersbarriers