In economics, an export is any good or commodity, transported from one country to another country in a legitimate fashion, typically for use in trade. Export is
an important part of international trade. Its counterpart is import.
Export goods or services are provided to foreign consumers by domestic producers. Export of commercial quantities of goods normally requires involvement of the
Customs authorities in both the country of export and the country of import.
The advent of small trades over the internet such as through Amazon, e-Bay and the like, have largely by-passed the involvement
of Customs in many countries due to the low individual values of these trades. Nonetheless these small exports are still subject
to legal restrictions applied by the country of export, particularly in respect of strategic export limitations.
History
-
The theory of international trade and commercial policy is one of the oldest branches of economic thought starting with the
ancient Greeks up to the present era. Exporting is a major component of international trade, and thus is argued constantly and
consistently throughout the ages. Two dual views concerning trade present themselves. The first, recognizes the benefits of
international exchange. The other concerns itself with the possibly that certain domestic industries (or laborers, or culture)
could be harmed by foreign competition.
Process
Methods of transfer include a product or good or information being mailed, hand-delivered, up-loaded to an internet site, or
downloaded from an internet site. It can be sent in the form of an email or during a telephone conversation.
United States
The Bureau of Industry and Security (BIS) is responsible for implementing and enforcing the Export Administration Regulations
(EAR), which regulate the export and reexport of most commercial items. Some commodities require certification in order to
export. There are different qualifications for what need to be done in order to export a good.
Dependent on the category,[1] the 'item' falls under,
the company may need to attain a license as a requisite to exportation. Some restrictions vary from country to country. The most
restricted destinations are the embargoed countries and those countries designated as supporting terrorist activities, including
Cuba, Libya, North Korea,
Sudan, Syria and Iran (see:
Sanctions against Iran). Some products obtained worldwide restrictions.
An item is considered an export whether or not it is leaving the United States temporarily, if it is leaving the United State
but is not for sale (a gift), or if it is going to a wholly owned U.S. subsidiary in a foreign country. A foreign-origin item
exported from the United States, transmitted or transhipped through the United States, or
being returned from the United States to its foreign country of origin is considered an export.[2]
How an item is transported outside of the United States does not matter in determining export license
requirements.
Refer to http://www.census.gov/foreign-trade/Press-Release/2006pr/aip/related_party for data on exports by industry for the
year 2006.
United Kingdom
Export controls are largely the concern of the Department of Trade and
Industry (DTI).
Canada
Canadian Export and Import Controls Bureau (EICB)
Australia
Australian Defence Trade Control and Compliance (DTCC)
Isle of Man
Isle of Man Customs and Excise Division
Barriers
Trade barriers are generally defined as government laws, regulations, policy, or practices that either protect domestic products from
foreign competition or artificially stimulate exports of
particular domestic products. While restrictive business practices sometimes have a similar
effect, they are not usually regarded as trade barriers. The most common foreign trade barriers are government-imposed measures
and policies that restrict, prevent, or impede the international
exchange of goods and services. [3]
Strategic
International agreements limit trade in, and the transfer of, certain types of goods and information e.g. goods associated
with weapons of mass destruction, arms and torture. Examples are Nuclear Suppliers
Group - limiting trade in nuclear weapons and associated goods (currently only 45 countries), The
Australia Group - limiting trade in chemical & biological weapons and associated goods (currently only 39 countries),
Missile Technology Control Regime - limiting trade in the means of
delivering weapons of mass destruction (currently only 34 countries) and The Wassenaar
Arrangement - limiting trade in conventional arms and technological developments (currently only 40 countries)
Tariffs
A tariff is a tax placed on a specific good or set of goods exported from or imported to a
country, creating an economic barrier to trade.
Usually the tactic is used when a country's domestic output of the good is falling and imports from foreign competitors are
rising, particularly if there exist strategic reasons for retaining a domestic production capability.
Some failing industries receive a protection with an effect similar to a subsidies in that by
placing the tariff on the industry, the industry is less enticed to produce goods in a quicker, cheaper, and more productive
fashion. The third reason for a tariff involves skirting of what is called dumping. Dumping curtails a country producing highly excessive amounts of goods and
dumping the goods on another foreign country, producing the effect of prices that are "too low". Too low can refer to
either the price of the good on from the foreign market being lower than the domestic market. The other reference refers to the
producer selling the product at a price in which there is no profit or a loss. [4] The purpose (and expected outcome) of the tariff is to encourage spending on
domestic goods and services.
Protective tariffs protect what are known as infant industries that are in the phase of expansive growth. A tariff is
used temporarily to allow the industry to freely grow without the level of competition usually garnered. However, this line of
debate is only valid if the resources are more productive in their new use than they would be if the industry had not been
started. Also, the industry eventually must incorporate itself into a market without the protection of government subsidies.
[5]
Tariffs create tension between countries. Examples include the United States
steel tariff of 2002 and when China placed a 14% tariff on imported autoparts. Such tariffs usually lead to filing a
complaint with the World Trade Organization (WTO) [6] and, if that fails, could eventually head toward the country placing a
tariff against the other nation in spite, to impress pressure to remove the tariff.
Subsidies
To subsidize an industry or company refers to, in this instance, a governmental providing supplemental financial support to
manipulate the price below market value. Subsidies are generally used for failing industries that need a boost in domestic
spending. Subsidizing encourages greater demand for a good or service because of the slashed price.
The effect of subsidies deters other countries that are able to produce a specific product or service at a faster, cheaper,
and more productive rate. With the lowered price, these efficient producers cannot compete. The life of a subsidy is generally
short-lived, but sometimes can be implemented on a more permanent basis.
The agricultural industry is commonly subsidized, both in the United States, and in other countries including Japan and
nations located in the European Union (EU).
Critics argue such subsidies cost developing nations $24 billion annually in lost income according to a study by the
International Food Policy Research Institute, a D.C. group funded partly by the World Bank. [7] However, other nations are not the only economic 'losers'.
Subsidies in the U.S. heavily depend upon taxpayer dollars. In 2000, the U.S. spent an all-time record $32.3 billion for the
agricultural industry. The EU spends about $50 billion annually, nearly half its annual budget on its common agricultural policy
and rural development. [7]
Exports and free trade
Pros
The theory of comparative advantage materialized during the first quarter of
the 19th century in the writings of 'classical economists'. While David Ricardo is most
credited with the development of the theory (in Chapter 7[8] of his Principles of Political Economy, 1817)[9], James Mills and Robert Torrens produced similar ideas. The idea stems from a country that is able to produce a commodity
at the lowest of all countries, should be encouraged by removing competition. The single commodity with the greatest difference
in terms of low prices is encouraged to increase production, while the second and subsequent
commodities should either be decreased in levels of production, or removed altogether.
Cons
Mercantilism, the first systematic body of thought devoted to international trade,
emerged during the 17th and 18th centuries in Europe. While most views surfacing from this school of thought differed, a commonly
argued key objective of trade was to promote a "favorable" balance of trade,
referring to a time when the value of domestic goods exported exceeds the value of foreign goods imported. The "favorable"
balance in turn created a balance of trade surplus.
Mercantilists advocated that government policy directly arrange the flow of commerce to conform to their beliefs. They sought
a highly interventionist agenda, using taxes on trade to manipulate the balance of trade or commodity composition of trade in favor of the home
country. [9]
Notes
- ^ http://www.access.gpo.gov/bis/ear/ear_data.html#ccl
- ^ [http://www.bis.doc.gov/licensing/exportingbasics.htm Introduction to Commerce Department Export Controls]. Bureau of
Industry and Security (Last accessed 05-21-06).
- ^ Targeted Trade
Barriers (Last accessed 05-21-06).
- ^ Mike Mofatt (Last accessed 05-21-06). The Economic Effect of
Tariffs.
- ^ The Protective Tariff (Last accessed 05-21-06).
- ^ Darren Gersh. "US/China Trade Tensions Thicken
Over Auto Parts", PBS transcript, Last accessed 05-21-06.
- ^ a b Jeffrey Sparshott. "Agricultural subsidies
targeted", The Washington Times, Last accessed 05-21-06.
- ^ full chapter 7
- ^ a b
See also
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