Countervailing Duties (CVDs) are applicable when a government in the exporting country provides subsidies or assistance to a local industry. This can be in the form of subsidized loans, tax exemptions, indirect payments, etc. The assistance provided enables these foreign suppliers and manufacturers to potentially export and sell the goods for a price less than that at which domestic companies of the target member country can reasonably sell.
Countervailing Duties are meant to neutralize the adverse effects of the subsidies allowed for a particular product in exporting member country. CVD Investigations can be initiated, if there is sufficient evidence to the effect that; there is subsidy, there is injury to the domestic industry; and there is a causal link between the subsidized imports and the injury, that is to say, that the subsidized imports have caused the alleged injury. In CVD cases, a pre-initiation consultation is granted to the government of the subject country(ies) for defending their respective interest. To know more please read the attached briefings.
Happy reading!!
info@theknowledgeandlearning.com
One thought on “Countervailing Duties (CVDs): A tool for fair trade”