Compensatory Tax

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Compensatory Tax

Summary of Compensatory Tax

A special import levy imposed by the European Economic Community upon certain agricultural imports when the entry price of such products falls below a reference, or minimum target, price and the import is priced so as to reflect an export subsidy. Compensatory taxes are institutionalized in the common agricultural Policy (read this and related legal terms for further details) of the European Economic Community.

(Main Author: William J. Miller)

Compensatory Tax and the GATT Policy Negotiations

In relation to the GATT Policy Negotiations, Christopher Mark (1993) provided the following explanation and/or definition of Compensatory Tax: An import levy applied by the European Community to certain agricultural products when the import price is below a reference (or minimum target) price and reflects an export subsidy. Not the same as a variable levy.

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