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Customs Valuation Procedures
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Not all
countries use the same method to assess the import duty on the value of goods imported. By using one method rather than another, an importing country can set a higher value on the goods and therefore levy a larger
Ad Valorem duty.
Secrets of International
Trade
Voluntary Restraints
- Sometimes, when one of its domestic industries is being badly hurt by foreign imports, a government will undertake to persuade the exporting countries to
"voluntarily" restrict their exports.
One guilty country of such practice was Canada. Its previous Customs code allowed it to impose duty levels not directly related to the price paid for the goods but to what is termed
"fair market value" and
was considered by other countries as a
non-tariff barrier and an unfair protective device.
It was defended by Canada as a necessary measure
to prevent predatory export pricing by foreign firms and the setting of
artificially low transfer prices on goods sold to Canadian subsidiaries
by foreign multinational parent corporations.
Canada agreed to adopt the standardized GATT customs valuation procedure
in 1984. This has involved a switch from "fair market value" to
"international transaction price" as the basis for assessment of import duties, at the Tokyo round of GATT trade negotiations that ended in 1979
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