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Thus, variable levies do not necessarily beggar thy neighbour.
Variable levies on agricultural products are justified by policymakers as a protection against imported volatility.
As shown in this paper, it is possible to design a system of variable levies that protects against imported volatility without exporting the home-grown volatility.
This position is challenged by economists who argue that variable levies accentuate the world market volatility and can only buy stability for some countries at the expense of others.
The most important features of the CAP mechanism are the target prices, the threshold prices, the support or intervention prices, the variable levies on imports to make up the difference between landed prices and threshold prices, and export subsidies or refunds equal to the difference between market prices in the EEC and in the importing country.
A wide range of tariffs and non-tariff barriers (NTBs) such as import quotas and variable levies were applied to agricultural products before the Uruguay Round.
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So what are the policy implications?Price dependent trade-policies like trade-policies likeble levy, the praCAPce of disposing "excess" crops as food aid, or Argentina's expold tax–make the global supply more variable.
A variable levy or tax based on the difference between the threshold price and the international market price is imposed on EU imports.
This is achieved through a variable levy system that maintains a constant threshold price, and this is the price paid by importers of wheat in the EU.
There is a danger that, if applied tariffs are adjusted regularly in response to changes in world market prices, then they will be interpreted as a variable levy whose use is not permitted under the AoA.
In the cases of both the 1973 and 1995 production shortfalls, the international price for wheat rose above the threshold price and the EU switched from the variable levy and export restitutions to an export tax that maintained the level of the threshold price.
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Justyna Jupowicz-Kozak
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