Production subsidy
The production subsidy is a donation, granting of advantages or other form of concession to an industry or to individual industrial companies with the aim of promoting the manufacture of one or certain products. It is irrelevant here whether the respective product is exported or only distributed in the country of origin.
Definition of the production subsidy
An internationally valid and recognized definition of the type of subsidy production subsidy does not (yet) exist. (This is also true for the more general term " subsidy ".) An internationally accepted definition but is desirable to provide a clear demarcation to another essential form of price undercutting, namely the dumping permit. Dumping is defined as “ price discrimination between national markets” or - following the more general legal definition chosen for technical reasons - as “the placing of goods in one country on the market in another country below their normal value”. After all, there are one or the other approach to defining production subsidies. In contrast to dumping, which is used in particular by entrepreneurs, production subsidies (as well as subsidies in general) are a measure of state economic policy aimed at undercutting the prices of products that compete with one another on the market. However, this attempt at definition does not do justice to the US understanding, since US law also includes private benefits, e.g. B. by companies, banks and associations, are considered a "subsidy".
In Art. VI Para. 3 GATT (= General Agreement on Tariffs and Trade ; German : General Customs and Trade Agreement ) there is talk of “premiums or subsidies that are directly or indirectly used in the country of origin or export for production, extraction or export a good, including any special subsidy granted for the carriage of a particular good ”. Again, however, it is more of a description than a definition.
According to a definition attempted by Lehmann “... the law understands production subsidy as a measure on the part of a government or on the part of a private person, which distorts the conditions of competition in international trade and which, in particular from the recipient's point of view, represents a donation through which the recipient was preferred to other companies in his home country and also gained an economic advantage, taking into account the intended use of the grant. ” Lehmann therefore subsumes under the term“ production subsidy ”not only state grants, but also benefits from the private sector. With this, he obviously follows the US understanding of a subsidy (see above). Under EU law, however, only state aid is considered a subsidy.
The difficulties in clearly defining the concept of subsidy and thus also the more specific concept of production subsidy are likely to be found in the complex nature of the problem. It is Z. For example, it is hardly possible to differentiate between subsidies that serve to implement economic and social programs and those that - indirectly or directly, intentionally or unintentionally - impair international trade. It is also rarely possible to establish clear boundaries between sensible government policy and the unfair attempt to relocate one's own economic problems to other countries by means of exports.
Differentiation production subsidy - export subsidy
The production subsidy represents a basic type of subsidy. A second basic type of subsidy is distinguished from this, the export subsidy . It applies when grants are tied to the condition that the products promoted in their manufacture are exclusively for export. According to what was said at the beginning, however, the production subsidy conceptually includes the export subsidy, i.e. it forms the umbrella term for the two types of subsidy in question. (The term "domestic subsidy" is also used in direct contrast to export subsidies.)
The common feature of production subsidies and export subsidies is that they both require a benefit to be given to the company or to the industry in question, whereby the type of benefit is not important in detail. In both cases, direct or indirect benefits can be granted by the state.
Examples of direct production subsidies (or export subsidies)
Financial aid, exemption from taxes and social security contributions , interest relief for loans , assumption of guarantees .
Example of indirect production subsidy
State support for power plants on the condition that they consume lignite as an energy source = indirect subsidization of open-cast lignite mining (but at the same time direct subsidization of the "product" generated by the power plant in question)
Benefits from production subsidies
The production subsidy enables the product of the domestic industry, although this produces more expensively, to win the competition with the - actually cheaper - imported product. Such an effect, which is advantageous for the domestic industry, could in itself also be achieved through a corresponding tariff on the imported goods. However, a tariff (instead of a production subsidy) would mean an increase in the price not only of the imported product but also of the corresponding domestic (unsubsidized) product for the domestic consumer. By contrast, the production subsidy results in a reduction in the price level of the competing products in question which is advantageous for the consumer.
The production subsidy has another advantage over the (“pure”) export subsidy: Since the export subsidy is only granted for export-specific products, it creates a great motivation for the (domestic) manufacturing company to primarily export its goods. Export subsidies therefore have an adverse effect on international trade. At the same time, however, this also results in a shortage and increase in the price of the goods in question for domestic consumers. Both disadvantages are not given to the same extent with production subsidies - since they are (also) granted for products sold domestically.
See also
Individual evidence
- ↑ Dietrich Scheffler: Legal aspects of the subsidy problem in the GATT. In: Law of the International Economy. (RIW) 1993, p. 402.
- ↑ J.-F. Beseler: The European Communities' defense against dumping and subsidies. Baden-Baden 1980, p. 41.
- ↑ Article VI Paragraph 1 GATT
- ↑ H.-J. Müller: GATT legal system after the Tokyo Round. Berlin 1986, p. 180.
- ↑ Section 303 of the US tariff Act of 1930.
- ↑ Christoph Lehmann: Production subsidies in countervailing customs law: Implementation of the GATT subsidy code in the USA and the European Communities. (= Writings on international law. Volume 51). Berlin 1990, p. 107 (also dissertation 1988)
- ↑ J.-F. Beseler: The European Communities' defense against dumping and subsidies. Baden-Baden 1980, fn. 2.
literature
- JH Jackson: Legal Problems of International Economic Relations, Cases, Materials and Texts. St. Paul, Minn. 1977, OCLC 422650145 .
- V. Kelkar: GATT, Export Subsidies and Developing Countries. In: Journal of world trade law. 14 (4) Jul / Aug 1980, pp. 369-373.
