export subsidy

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A subsidy to exporters, so that the price per unit received by the producers of exports is higher than the price charged to foreign customers. Direct export subsidies are prohibited by international agreement, but other government measures with similar effects are not uncommon. Exporters may be allowed refunds on tariffs on their inputs, subsidized credit, preferential access to ordinary credit in an economy, or assistance with their capital costs or training costs. In economies with either currency or direct controls on imports, exporters can be allowed priority in the allocation of scarce materials or foreign currency. Firms competing with imports which they claim have received export subsidies may be able to obtain countervailing import duties to offset the effects of these subsidies.

Subjects: Economics.

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