Tariff and non tariff barriers in international business pdf

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tariff and non tariff barriers in international business pdf

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Tariffs, and Non-Tariff Barriers

The barriers are: 1. Quantity Restrictions, Quotas and Licensing Procedures 2. Foreign Exchange Restrictions 3. Technical and Administrative Regulations 4. Consular Formalities 5. State Trading 6. Preferential Arrangement. Under this system, the maximum quantity of different commodities which would be allowed to be imported over a period of time from various countries is fixed in advance. The quantity allowed to be imported or quota fixed normally depends upon the relations of the two countries and the need of the importing country.

Quotas are very often combined with Licensing System to regulate the flow of imports over the quota period as also to allocate them between various importers and supplying countries. In this system a license or a permit has to be obtained from the Government to import the goods mentioning the quantity and the country from which to import. Under this system the importer must be sure that adequate foreign exchange would be made available for the imports of goods by obtaining a clearance from the exchange control authorities of the country before concluding the contract with the supplier.

The imposition of technical production, technical specifications etc. Such type of technical restrictions is imposed in case of pharmaceutical products etc. Besides technical restrictions, administrative restrictions such as adherence to certain documentary procedure are adopted to regulate imports.

These measures impede the free flow of trade to a large extent. Large number of countries demands that shipping documents must accompany the consular documents such as:. Sometimes, it is also insisted that such documents should be drawn in the language of importing countries. In case the documentation is faculty and is not drawn in the language of the importing country heavy penalties are imposed.

Fees charged for such documentation are quite heavy. In socialistic countries import and export transactions are handled by certain State Agencies. These agencies carry international trade strictly according to Government Policies. The member countries of the group negotiate and arrive at a settlement of preferential tariff rate to carry on trade amongst themselves.

These rates are much lower than the ordinary tariff rates and applicable only to the member nations of the small group. Article Shared by Saqib Shaikh. Related Articles. Difference between Tariff and Non-Tariff Barriers. Purchasing Power Parity Theory.

The Basics of Tariffs and Trade Barriers

The barriers are: 1. Quantity Restrictions, Quotas and Licensing Procedures 2. Foreign Exchange Restrictions 3. Technical and Administrative Regulations 4. Consular Formalities 5.

In International Business Tariff Barriers are related taxes imposed by Governments to control Import Export of one or more products with a particular country. Non-tariff barriers are government policies and actions other than tariff barriers. Specific Tariffs : relates to some specific attributes of the goods — weight, quantity, value and the like. Compound Tariff : is calculated partly as a percentage on value and partly as a rate per unit or weight. Non Tariff Barriers are any government regulation, policy or procedure other than a tariff that has the effect of restricting international trade or affecting overseas investment.

Non-tariff barriers to trade NTBs ; also called non-tariff measures , NTMs are trade barriers that restrict imports or exports of goods or services through mechanisms other than the simple imposition of tariffs. The Southern African Development Community SADC defines a non-tariff barrier as " any obstacle to international trade that is not an import or export duty. They may take the form of import quotas , subsidies, customs delays, technical barriers, or other systems preventing or impeding trade ". One of the reasons why industrialized countries have moved from tariffs to NTBs is the fact that developed countries have sources of income other than tariffs. Historically, in the formation of nation-states , governments had to get funding. They received it through the introduction of tariffs. This explains the fact that most developing countries still rely on tariffs as a way to finance their spending.


Market elements are intertwined with the intervention of a variety of national, international, and regional policies, creating a complex commercial network-e.g. non-.


Top 6 Types of Non-Tariff Barriers | Managerial Economics

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Trade barriers are government-induced restrictions on international trade, which generally decrease overall economic efficiency. Trade barriers are government-induced restrictions on international trade. Man-made trade barriers come in several forms, including:. Most trade barriers work on the same principle—the imposition of some sort of cost on trade that raises the price of the traded products.

The Basics of Tariffs and Trade Barriers

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Non-Tariff Barriers

In International Business Tariff Barriers are related taxes imposed by Governments to control Import Export of one or more products with a particular country. Non-tariff barriers are government policies and actions other than tariff barriers. Specific Tariffs : relates to some specific attributes of the goods — weight, quantity, value and the like. Compound Tariff : is calculated partly as a percentage on value and partly as a rate per unit or weight.

Today, however, tariffs are viewed and used differently. In effect, all tariffs increase the product price, which discourages its demand, and thereby insulates to a degree domestic producers from foreign competition. As a result, each country places higher tariffs on goods determined to be import sensitive. According to the World Bank, industrial countries are less sensitive to manufactured imports. As a result, they maintain low tariff levels on manufactured goods. However, due to their high sensitivity to agricultural imports, they maintain high tariff levels on agricultural products.

Tariffs, and Non-Tariff Barriers

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  • Tariff and Non-Tariff Barriers are restrictions imposed on movement of goods between countries. Maybeok - 03.05.2021 at 21:27

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