Theory question 106
Foreign TradeCommerce 2 (essay)
Explain five measures taken by a country to:
(a) Restrict imports
(b) Promote exports
Show the model answer
Model answer
(a) Any five, explained: high tariffs (import duties); import quotas; import licences; exchange control (rationing foreign exchange); outright ban/embargo; import deposits; subsidies to local industries producing substitutes; devaluation.
(b) Any five, explained: export subsidies and tax relief; export credit guarantee/insurance; trade fairs and exhibitions abroad; export promotion council and market information; devaluation (making exports cheaper); removing export duties; export processing (free) zones; improving quality standards; better port facilities; trade agreements with other countries.
Explanation
Explain how each measure works.