New World, New Policy: Dumping penalties – Give to Cesar what you owe to Cesar

money from all over the worldPresident Trump has issued a new executive order focusing on international cheaters, who do not pay their debts due to dumping penalties. The order targets the problem of unpaid special customs duties known as “Countervailing Duties” (CVD), levied on products from companies found guilty by an “anti-dumping” investigation.

First to the jargon: “Dumping” refers to a type of predatory trade practice. In its simplest form, it amounts to a company selling a product in a foreign market for less than it costs to make it. In theory, the goal of “dumping” is to drive down the price, and in doing so, muscle out smaller, weaker competition in order to later establish a monopoly status on that market. Under the rules of the World Trade Organization, dumping is a prohibited practice, and countries are permitted to levy special taxes on goods found to be unfairly dumped in their market in order to rebalance the price level. These tariffs are called “Countervailing Duties”, abbreviated as CVD.

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Green electricity and the international trade challenges

Questions about the future of the electricity trade focus on the rise of renewable energy, which is seen as a means of mitigating greenhouse gas emissions from the electricity sector. Many governments wish to integrate renewable power into their transmission and distribution systems and offer tax or other incentives for its generation.

Read also: African Energy: U.S. Dept of Commerce Delegation will travel to Ghana and Nigeria

  “My take is that the future will be increasingly distributive,” said Fereidoon Sioshansi of energy consultants Menlo. “Instead of producing a lot of power at centralised plants and shipping it long distances you can generate most of the power you need, perhaps through solar panels on your rooftop.”

 ok3On the other hand, the idea of a global grid enabling long-distance electricity trade has been gaining currency. The global grid would also absorb renewable energy, integrating it into transmission and distribution systems. But it requires high levels of investment and the modernisation of infrastructure, and this can be problematic, not least in the developing world.

 “The main challenges of the electricity trade in Africa include financing, lack of capacity and planning and maintenance issues,” said Callixte Kambada of the African Development Bank, who made a contribution on the African regional experience.

 Despite that African electricity was becoming increasingly interconnected to parts of southern Europe and the Middle East. “I think it’s only a matter of time before we have a global grid,” he said.

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