Introduction:
Trade across
political boundaries is interrupted by a bucket of barriers which do not let
the countries to exploit their comparative advantages. Whenever a good crosses
the international lines a set of duties known to as tariff coupled with some
non-tariff restrictions emerge to limit the spirit of international trade.
What is ‘Non-Tariff-Barriers’
Non-Tariff Barriers are obstacle
to international trade which are not an import or export duty. They may take
the form of import licensing, rules for valuation of goods at customs,
pre-shipment inspections, subsidies, customs delays, technical barriers, trade
prepared investment measures import quotas or other systems preventing trade.
Discussion
Non-tariff barriers can be
discussed by classifying them in the following headings
1. Protectionist
policies
2. Assistance
policies
3. Non-protectionist
policies
Protectionist Policies
Restricting import is a way to
protect domestic firms. Protectionist policy helps domestic firms at the
expense of other countries. Example of this form of barrier includes Import
quotas; local content requirements; public procurement practices etc. Quota
limits the trade in physical terms, imposed on import and export of certain
goods for a certain period of time.
Assistance Policies
The instruments included in this category
are meant for the help of domestic firms and enterprises irrelevant to the
expense of other countries. Examples are -Domestic subsidies, antidumping laws
etc. Because of subsidy production cost in a nation falls significantly and
prices go down which outcompetes the existing exporters.
Non-protectionist policies
This type of trade-barrier is for
the protection of the health and safety of people and the environment. Licensing,
packaging, and labeling requirements, sanitary and phytosanitary (SPS) rules,
food, plant and animal inspections, import bans based on objectionable fishing
or harvesting methods are some of the prominent examples of this type of
barrier. The most common instrument is the licensing. It requires that the
authority issues permits for foreign trade transactions of import and export
commodities included in the lists of licensed merchandises.
