GLOBAL FRAMEWORK FOR EXPORT MARKETING MODULE 2

Transcript:GLOBAL FRAMEWORK FOR EXPORT MARKETING MODULE 2:
GLOBAL FRAMEWORK FOR EXPORT MARKETING MODULE 2 TRADE BARRIERS “artificial restrictions imposed by countries on free movement of goods and services in between different countries/nations” OBJECTIVES OF TRADE BARRIERS To protect domestic industries To promote new industries To maintain favorable balance of trade To conserve foreign exchange reserves To protect national economy To earn extra revenue To counteract trade barriers To encourage the use of domestic production TYPES OF TRADE BARRIERS TARIFF BARRIER- It refers to the taxes/ custom duties and other levies imposed on internationally traded commodities when they cross the national boundaries NON TARIFF BARRIER – Any measure other than the tariffs introduced for restricting the entry of foreign goods can be treated as a non tariff barrier. They are quantitative restrictions imposed. CLASSIFICATION OF TARIFF BARRIERS On the basis of origin and destination of the goods Export Duty Import Duty Transit Duty B) On the basis of quantification of the tariff Specific duty – for e.g. Rs 50 on each unit of TV imported Ad- Valorem Duty – value of the commodity Compound duty – mix of specific and ad valorem C) On the basis of purpose Revenue tariff Protective tariff Anti dumping duties Countervailing duties D) On the basis of Trade relation Single column tariff Double column tariff Triple column tariff – lower rate, higher rate and preferential rate Benefits of tariff barriers Discourage imports Protection to home industry Reduction in consumption of foreign products Revenue to the government Removal of trade deficit Encouragement to R&D activities Additional employment creation Classification of Non Tariff barriers Quota system – limits the quantity of the import Tariff Quota Unilateral Quota Bilateral Quota Mixing quota 2. Import Licencing and Domestic content requirements 3. Consular formalities 4. Preferential treatment through trading blocs 5. Customs regulation 6. State Trading 7. Foreign exchange regulations 8. Fixing product standards Distinguish between Tariff and Non Tariff Barriers Meaning Kinds Effect Effectiveness Effects on import Revenue earning capacity Time for effectiveness POSITIVE IMPACT OF TRADE BARRIERS Protection to domestic industries Additional revenue to the Government Improvement in BOT and BOP Conservation of foreign exchange Accelerates growth process NEGATIVE IMPACTOF TRADE BARRIERS Restricts free movement of goods and services Volume of world trade reduces Countries are artificially kept away from each other Production activities are adversely affected Countries with surplus production are unable to utilize it fully TRADING BLOCS / ECONOMIC GROUPINGS Trading Bloc is the