Offsets Or Offset Requirements

Offsets or Offset Requirements and the GATT Policy Negotiations

In relation to the GATT Policy Negotiations, Christopher Mark (1993) provided the following explanation and/or definition of Offsets or Offset Requirements: Requirements imposed by governments on foreign exporters as a condition for approval of major sales agreements. Offsets can be intended either to reduce the adverse trade-balance impact of a major sale or to “leverage” specific industrial benefits for the importing country .In one type of offsets, an exporter may be required to purchase a specified amount of locally-produced goods or services from the importing country .In a second form, the exporter may be required to establish manufacturing facilities in the importing country or to secure a specified percentage of the components used in manufacturing the product from producers based in the importing country.