Tariff and Non – Tariff Barriers Overview Trade

Transcript:Tariff and Non – Tariff Barriers Overview Trade:
Tariff and Non – Tariff Barriers Overview Trade Barriers Used to encourage and protect existing domestic industry Trade barriers are Tariffs that Increase Trade Weaken Trade Restrict Trade Quotas Boycotts and Embargoes Impact of Tariff (Tax) Barriers Tariff Barriers tend to Increase: Inflationary pressures Special interests’ privileges Government control and political considerations in economic matters The number of tariffs they beget via reciprocity Tariff Barriers tend to Weaken: Balance-of-payments positions Supply-and-demand patterns International relations (they can start trade wars) Non Tariff - Trade Barriers Non Tariff barriers - are another way for an country to control the amount of trade that it conducts with another country, either for selfish or altruistic purposes. Any barrier to trade creates an economic loss, which means it does not allow the markets to function properly. 2) Customs and Administrative Entry Procedures: • • • • • Valuation systems Antidumping practices Tariff classifications Documentation requirements Fees 1) Specific Limitations on Trade • • • • • Quotas Import Licensing requirements Proportion restrictions of foreign to domestic goods (local content requirements) Minimum import price limits Embargoes Six Types of Non-Tariff Barriers ( 3 ) S t a n d a r d s : Standard disparities Intergovernmental acceptances of testing methods and standards Packaging, labeling, and marking (4 ) G o v e r n m e n t P a r t ic ip a t io n in T r a d e : Government procurement policies Export subsidies Countervailing duties Domestic assistance programs Six Types of Non-Tariff Barriers (cont'd.) 5) Charges on imports: Prior import deposit subsidies Administrative fees Special supplementary duties Import credit discriminations Variable levies Border taxes 6) Others: • • Voluntary export restraints Orderly marketing agreements Six Types of Non-Tariff Barriers (cont'd.) • New Zealand's apples account for a third of its agricultural exports but have been banned from Australia since 1921 due to fears about the spread of fire blight, a crop pest. By Doug Latimer in Sydney Published: 1:00AM BST 13 Apr 2010 Apples Banned - Non Tariff Barrier Mangoes Philippines – Restrictions It is a common practice in many countries to use non- tariff barriers to control the entry of imports. For instance, Philippine mangoes and bananas have to meet strict phytosanitary requirements from the US and Australia. McDonald France – Big Beef McDonalds France in 1998, ran a print ad campaign featuring overweight cowboys complaining about