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Tariffs and trade policy in the Andean common market (English)

Recommendations are made on the establishment of the common external tariff for the Andean Common Market (ACM) as well as on export taxes and subsidies, quantitative restrictions, import surcharges, and advance deposit requirements. The recommendations call for setting tariff rates so as to attain the desired structure of effective rates of protection in the ACM, for levying export taxes on commodities facing less than infinitely elastic foreign demand, and for granting subsidies to all other exports. The resulting structures of protection would permit maximizing foreign exchange earnings from traditional exports, while providing incentives to manufacturing vis-a-vis primary activities in general. Recommendations are also made for abolishing quantitative restrictions and other nontariff measures of import protection; for establishing a "code of good behavior" on tax, credit, and expenditure incentives; and for applying flexibleexchange rate arrangements in the member countries. However, the harmonization of monetary fiscal, and financial policies is not necessary for the optimal operation of the ACM. Economic and trade data are included.

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Citation

Balassa,Bela

Tariffs and trade policy in the Andean common market (English). Staff working paper ; no. SWP 150 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/787781468769210484/Tariffs-and-trade-policy-in-the-Andean-common-market