World experience shows that even in a developed market economy there is an objective need for state regulation of foreign trade activities. At the same time, the state is called upon to protect the interests of its producers, take measures to increase exports in every possible way, attract foreign investment, protect the interests of economic entities, legislatively consolidate the conditions of existence in foreign trade activities and control over their strict observance, both by residents and non-residents. In general, state regulation of foreign trade is a system of measures of influence of various public institutions and state bodies on foreign trade relations in order to most effectively use the advantages of the international division of labor.
State regulation of the economy as a whole is carried out through various forms and methods, the most important of which are forecasting, planning and programming. In the context of state regulation of foreign trade activities, forecasting pursues the goals of forming a strategy and priorities in the development of national industries capable of ensuring the production of competitive products and fitting into the world market. Planning is aimed at coordinating the positions of the public and private sectors in the field of foreign trade, in the planning process for every 3-5 years the necessary volumes of industrial production, the size of capital investments, the size of the desired growth in production, etc. Programming is carried out through appropriate programs.
The world practice of a market economy has developed quite effective fundamental approaches and mechanisms for state regulation of foreign trade activities, although 2 contradictory trends still collide in this area: protectionism, i.e. protection of own production from foreign competition and liberalization, i.e. providing the greatest possible freedom of access of foreign goods and services to the domestic market. Almost all states seek to find a compromise between protectionist measures and liberalization of foreign trade activities of residents and non-residents.
In accordance with world practice, states use 2 sets of regulatory methods:
economic (tariff, indirect); administrative (non-tariff, direct).
Economic methods are the stimulation or disincentives of participants in foreign trade activities to carry out or refrain from performing specific operations (transactions). For this purpose, such economic instruments as taxes, duties, subsidies, preferential lending and insurance, currency regulation, the direction of resources from the state budget to the development of export industries and the information infrastructure of foreign trade activities, etc. Indirect such regulation is considered because the state does not prohibit the implementation of foreign trade operations, but only regulates the level of profitability of the relevant operations and thereby regulates the level of profitability of the relevant operations. effectively affects the decision of economic entities on the expediency of their implementation.
In the conditions of a developed market structure, economic methods are the most effective. At the same time, as a rule, exports are stimulated by all sorts of benefits and in some cases imports are limited, in particular, by high import duties. Usually, the benefits are not discriminatory in order to create equal conditions for all participants in foreign trade.
The main tool in the hands of the state in regulating foreign trade is the use of tariff regulation through a customs tariff. The customs tariff is a systematized list of customs duty rates on goods transported across the border of a given country, established at the legislative level. The customs tariff is the most common instrument of state regulation of foreign trade, acting through the pricing mechanism.
Among the main functions of the customs tariff, protectionist and fiscal ones stand out. The protectionist function is associated with the protection of national producers. The collection of customs duties on imported goods increases the value of the latter when selling them in the domestic market of the importing country and thereby increases the competitiveness of similar goods produced by national industry and agriculture. The fiscal function of the customs tariff ensures the receipt of funds from the collection of customs duties in the revenue part of the country’s budget.
Administrative (non-tariff) methods of state regulation of foreign trade turnover include numerous measures that limit the use of foreign goods in the domestic market of the country. According to experts, more than fifty types of non-tariff restrictions are used in foreign trade turnover.
According to the GATT/WTO classification, non-tariff restrictions are divided into 5 main groups:
quantitative restrictions on imports and exports, which include quotas and licensing; customs and administrative import-export formalities, including anti-dumping duties, methods of assessing the customs value of goods, customs and consular formalities, shipping documents; standards and requirements for the quality of goods, including sanitary and phytosanitary norms, industrial standards, requirements for packaging and labeling of goods; restrictions inherent in the payment mechanism: sliding fees, import deposits, benefits for certain industries and enterprises, exchange rate mechanism; participation of the state in foreign trade operations, namely: subsidizing the production and export of goods, the system of public procurement, state trade.
Quantitative restrictions directly regulate the quantity of goods imported into the country and exported outside its borders. Of all the types of non-tariff barriers, they are the most common. In practice, there are two main areas of application of quantitative restrictions: quotas and licensing.
Quotas are an administrative form of non-tariff state regulation of trade turnover, which is based on the restriction by the state power of the import (export) of goods in a certain quantity or amount for a specified period through import (export) quotas. Quotas are implemented through the licensing system.
Licensing is the regulation of foreign trade activities through permits issued by state bodies for the export or import of goods in established quantities for a certain period of time. The main types of licenses are one-time and general. One-time license is a written permission for a period of up to 1 year for import or export, issued by the authorized body to a particular company for the implementation of 1 foreign trade transaction. General – permission to import or export a particular product during the year without restrictions on the number of transactions.
In the next group of non-tariff restrictions, the most common are anti-dumping duties, which are applied in cases of import into the customs territory of the country of goods at a price lower than their normal value in the country of export at the time of importation, if such import causes or threatens to cause material damage to domestic producers of such goods or prevents the organization or expansion of production of such goods in the country. The main purpose of the application is to neutralize the negative consequences of unfair price competition based on dumping.
The next group is based on the so-called technical barriers, which establish the need to verify the compliance of imported products with the requirements of international and national standards and technical norms. Established either by law or by manufacturers’ associations.
If the Government deems it necessary to stimulate the export of national producers, it can provide them with subsidies from the budget in one form or another. Subsidies can be direct or indirect. Direct financing is carried out in the form of payments to the exporter of subsidies from the budget after he has performed an export operation in the amount of the difference between his costs and the income received by him. Indirect – hidden subsidies to exporters through the provision of tax benefits, preferential insurance conditions, the transfer of government orders to export companies at inflated prices, etc.