Drawbacks

Drawbacks, in Commerce, are repayments' of the whole or part of the duty levied on goods (either manufactured at home or imported) when the goods are exported. They were frequently given in the last century to encourage the importation, trans-shipment, and re-exportation of goods, and therefore the carrying trade of a country. The establishment of bonded warehouses (q.v.) has to ei great extent obviated this use of them. Adam Smith speaks of them as "a reasonable encouragement to trade." Whereas a drawback enables goods to be sold to the foreigner at their natural price, a bounty (q.v.) on export may enable them to be sold to him for less than that price. They were, of course, as stimulating exportation, an essential part of the mercantile system (q.v.).