This clause serves as an illustration of a local content requirement.
Government-backed insurance policies are now available in many investor nations to cover the main categories of foreign investment risk. Expropriation (nationalization), war losses, and the inability to reinvest revenues are only a few of the hazards covered by these programs.
Because exporting the commodities would be more expensive, producers would be motivated to keep their products domestically. As a result of the increased supply, prices for items are often lower. Why would a nation impose taxes on commodities exported?
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