EXPORT SUBSIDY Meaning and
Definition
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Export subsidy refers to a financial incentive granted by a government to domestic industries or producers to encourage exports. It is a form of economic policy employed to provide support and assistance to domestic companies in competing against international rivals by making their products more competitive in foreign markets.
Export subsidies are typically granted in various forms, including direct grants, tax breaks, low-interest loans, or government-sponsored insurance schemes. These financial incentives serve to reduce the cost of production or transportation, allowing exporters to lower the price of their goods or services in international markets. The aim is to increase the quantity and profitability of exports, stimulate economic growth, boost employment, and strengthen the balance of trade.
However, export subsidies can lead to trade distortions and have both positive and negative implications on the domestic and global economy. On the positive side, these subsidies can enhance the competitiveness of local industries, help them penetrate new markets, and generate higher revenues, employment, and economic growth. On the negative side, export subsidies can distort market forces, create unfair trade advantages over foreign competitors, and spark retaliatory measures by other countries, which may result in trade disputes.
Export subsidies are commonly employed by developing countries to support their industries and promote economic development. They are also utilized by advanced economies to maintain or expand their market share in specific industries. Regulations and agreements governed by the World Trade Organization (WTO) govern the use of export subsidies to avoid excessive market distortions and ensure fair global trade practices.
Common Misspellings for EXPORT SUBSIDY
- wxport subsidy
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- rxport subsidy
- 4xport subsidy
- 3xport subsidy
- ezport subsidy
- ecport subsidy
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- esport subsidy
- exoort subsidy
- exlort subsidy
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- expirt subsidy
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- expprt subsidy
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- expoet subsidy
Etymology of EXPORT SUBSIDY
The word "export subsidy" is formed from the combination of two separate terms: "export" and "subsidy".
1. Export: The term "export" originates from the Latin word "ex" meaning "out" and "portare" meaning "to carry". It entered the English language in the late 15th century and refers to the act of sending goods or services produced within a country to markets in other countries for sale or exchange.
2. Subsidy: The term "subsidy" comes from the Latin word "subsidium", composed of "sub" meaning "under" and "sedere" meaning "to sit". It entered the English language in the mid-17th century and refers to financial assistance or support given by the government or an organization to individuals, businesses, or industries to promote their activities.
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