Description

Minimum import prices ensure that a product cannot be imported at a price that is lower than a price set by the state. If the import price is below the minimum price, an additional charge is imposed.
Sometimes price ceilings are also set, thus creating an import price band. If the price exceeds the ceiling, duties are refunded to importers. Minimum import prices and price bands can be based on domestic market prices or international reference prices.

Under WTO rules, minimum import prices and price bands are regarded as non-tariff trade barriers and are therefore prohibited. However, they can be applied as an anti-dumping measure.

In integrated markets, minimum import prices and price bands are generally abolished internally. However, they may be included in certain bilateral or regional agreements in order to protect sensitive sectors.

Requirements

• A properly functioning country-wide administration and monitoring system with access to the relevant information and sufficient technical and human capacities for its design, implementation and monitoring
• Clear and coherent political strategy and targets for policy-makers and public authorities
• Close cooperation and knowledge sharing with research institutions
• Compatible regional and world trade law (WTO conformity)
• Constant market surveying and forecasting
• Efficient customs administration
• Market price information systems

Possible Negative Effects

• Higher prices for consumers and processors
• Lack of transparency compared with simple duties
• Minimum import duties have to be constantly adapted to fluctuating world market prices and therefore entail significant administrative effort
• Speculation on political decisions