The_Open_Door_deel1

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In order to protect the new company the Government further promised
an increase in the import tariff on vehicle tyres, tubes
and retread materials of the same type and sizes as would be
manufactured by Firestone-Liberia. The tariffs imposed in this
connection were not to be less than 150 percent of the CIF-prices
and would become effective on the date the first product of the
factory became available to the Liberian market. The Government
also promised to restrict the importation of these items prior
to the production by Firestone-Liberia in order to avoid hoarding
and speculation.
To offset any loss of duty revenue which might have resulted
from the protection afforded Firestone-Liberia, an excise tax
would be levied on all vehicle tyres and tubes and retread material
and other rubber products produced by Firestone-Liberia.
There was no time limit set for this protection via Liberia's
trade policy nor was there a time limit provided for the company's
right to unrestricted export licenses and to its exemption from
export and excise duties for the products of its factory.
For purposes of computing the company's income tax liability
(after the exemption period) several deductions were granted.
There would be no tax or levy on interest, dividends, royalties,
rents, compensation or other income remitted to recipients
abroad by Firestone-Liberia which would exceed the amount
that would be fully usable as a tax credit by the recipient.
The capital of the tyre plant would be acquired in the form of
paid-in capital funds and/or in the form of long-term loans.
No provision was made prescribing a maximum debt-equity ratio
despite the (costly) lesson which by now the Liberian Government
had learned from its experiences with other companies
notably the mining companies. (See chapters 7 and 8)
The new company would have no obligations and only rights.
Firestone-Liberia would not even have the obligation to use
(exclusively) Liberian produced rubber. The (draft) agreement
provided that the company would utilise Liberian natural rubber
in its production "to the greatest practicable extent". This
seemingly peculiar provision resulted from the extremely high
quality of Firestone's Liberian grown rubber which makes this
product more suitable and economically more attractive for use
in the computer and war industries (e.g. the production of
electrical wires, of high quality tyres for planes etc.) and
for medical equipment (e.g. surgical gloves).
Firestone's commitment though was conditional upon agreements
with surrounding countries and the company put pressure on the
Liberian Government to enter into negotiations with the governments
of these countries. This was connected with the provision
in the agreement which stated that construction of the
plant would commence 18 months after the Government of Liberia
would have notified Firestone of the conclusion of trade,
tariff and other agreements with neighbouring countries. Notably
the Government had to negotiate with the governments of the
Ivory Coast and Sierra Leone. However, as no progress was made
in this respect (68) this attempt to establish a tyre plant in