TPG1979 Chapter II Paragraph 49

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For the prices of goods to be comparable, it is necessary to look at prices of goods sold on markets which are economically com parable. The progressive liberalisation of international trade which has taken place during the last decades has certainly facilitated access to new markets, but is has not led, even in the countries where this liberalisation is the most extensive, to the constitution of one single market where transactions would be made always and everywhere under the same conditions. Only in very few cases is it possible to determine directly an arm’s length price in one country on the basis of market prices in another country. Geographically different markets therefore can be satisfactorily compared only if the economic conditions are the same or differences in conditions can be easily eliminated. The variety of economic and social structures, of geographical situations and of consumers’ habits means that supply and demand of the same product may vary considerably from one country to another. In practice, market prices do vary from one country to another or even within one country and in addition different country policies in many spheres (for example, value of currency, taxes, competition policy, price or exchange control, size and efficiency of market and degree of concentration) are likely to influence price levels. On the other hand, an enterprise enjoying a monopoly or other dominant position in the market can, and often will, charge uniform prices to all its unrelated customers or to all of them in particular areas, or uniform prices modified only by identifiable market specific factors such as import duties. This situation may be found for example in the pro vision. of certain refill goods or spare parts.






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