What are Trade Barriers?
Government policies and measures Imposed on imports and exports Man made obstacles Artificial restrictions
Types of trade barriers
Tariff Barriers
Non-tariff Barriers
Tariff Barriers
Duties or taxes imposed on international trade Important instrument High rates
1.On the basis of the origin and destination of the goods crossing national boundary
• Export duties • Import duties • Transit duties
2.On the basis of quantification of the tariff
• Specific duties • Ad-Valorem duties • Compound duties
3.On the basis of application between different countries
• Single-column tariff • Double-column tariff • Triple column tariff
4.On the basis of purpose they serve
• • • • Revenue tariff Protective tariff Countervailing duties Anti-dumping duties
Non-tariff Barriers
• Grown considerably since the beginning of 1980s • Non-tariff Barriers fall under two categories -first category includes used by developing countries -second category used by developing countries to protect domestic industries
Types of Non-tariff barriers
1) 2) 3) 4) 5) Quota system Import licensing Consular formalities Preferential treatment through trading blocs Custom regulations
6) Foreign exchange regulations 7) State trading 8) Health and safety regulations 9) Prior import deposits 10) Miscellaneous duties
Effects of barriers on international trade(Impact of Tariff)
1. 2. 3. 4. 5. 6. 7. 8. Protective effect Consumption effect Redistribution effect Revenue effect Income and employment effect Competitive effect Terms of trade effect Balance of payments effect
Effects of barriers on international trade(Impact of Quotas)
1. 2. 3. 4. 5. 6. Balance of payments effects Price effect Consumption effect Protective effective Redistributive effect Revenue effect