Variable Levy

Variable Levy

A tariff that changes in such a way that the domestic price of an imported good always remains the same (or almost the same). A variable levy increases when the raw price of the import drops and decreases when the raw price rises.
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The variable levy rate will be lower across all property categories than the 2013-14 rates.
Recently the World Bank has encouraged countries to convert existing quantitative trade restrictions into price constraints as a prelude to gradual, scheduled reductions in barriers to trade.(19) Where the expected benefit from tariff protection is positively related to world price variance, gradual liberalization in industries that receive redundant protection could be facilitated by switching to a variable levy that reduces domestic price fluctuation.
A zero quota or a variable levy can also be used to provide prohibitive levels of protection, but each has certain liabilities.
Quantitative restrictions, along with the variable levy, are commonly referred to as "hard-core" NTMs.
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