Trade Barriers and Tariff Barrier Paper Example

Introduction

Tariffs are surcharges which an importer pays above beyond taxes which are levied on domestic products. Or a tax imposed on the goods which are imported.Tariffs barriers are import taxes which are most applied trade barrier in the market. There are two types of tariffs namely protective and revenue tariffs. These taxes are imposed by the government to obtain government revenue or protect the local or domestic businesses from the competition. (Lopus, 2013).Tariffs protect domestic industries and consumers where a government may impose a levy on a product that may endanger the consumer and leads to the higher price of an import.

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Non-Tariff Barrier

They are restrictions which are as a result of conditions, prohibitions or a certain mark requirement which makes exportation or importation of goods to be costly and difficult. They are also unjustified or are of improper nontariff measures application, These barriers arise from various government measures and authorities which are informed of regulations, laws, policies , restriction or conditions or any prohibition which helps protect the domestic industries from international competition. Examples of this barriers include; Imports bans, import licenses, export subsidies, buy national policies, occupational safety, and health safety etc. The non tariff barrier can also be defined as any measure employed in order to restrict import other than import duties. This measure includes direct and indirect price influencers.

Import Licenses

This Is the permit which allows the importer , to import a specified quantity of goods in a specified period of time which is usually 1 year. This license helps in restricting the foreign currency outflow in order to improve the balance of payment position of a country. It helps protect the domestic industries from international competition. It also controls dangerous items entry.

Export Licenses

An export license can be defined as the document which grants business entity or an individual the rights to export or import goods or a specific commodity shipment to a named country. This license is required by all exporters or is required only for a specific export. These licenses are required for certain exports such as cultural relies, natural resources, technology, drugs, Food products, live animals, armaments and arms, and strategic commodities. These Licenses are issued by government or export authority agencies with regulatory authority of the export country. (Hinkelman, 2008).

Subsidies

Is the Finacial contribution by any public body or government within member's territory which confers a benefit. They can include tax relief grants, direct payments, low-interest loans granting, government stock disposal at a price of below market, marketing subsidies, Freight and transportation subsidies. (Miller & Miller, 1995). However, export subsidies can be referred to as the government policy that promotes export and discourages goods to be sold on tax relief or low-cost loans for exporters . It reduces the price paid by international importers.

Voluntary Export Restraints

Is a government restriction on the quantity of the goods which can be exported in a specified period of time. This trade barrier arises in times of import-competing industries requires protection from imports from exporting countries. They are offered to appease the import countries by the exporter to avoid causes of trade restraints on the importer's part. This restaurant is implemented in a bilateral way. From an exporter to an importing country. This restraint can also be defined as a self-imposed limitation that specifies the number of goods that a country is supposed to export to the other.

Local Content Requirements

This is policies that are imposed by a government which requires companies to use manufactured goods and suppliers services which are domestic in order to operate within an economy. They can also be defined as the policy that requires an intermediate good which is used in the production and is sourced from domestic manufacturers and industries.

Embargo

This is the official export and import suspension of some specific goods from or to a specific country, port or religion for health, labor, political related reasons for an indefinite or specified period. It can also be defined as a policy or law that is initiated by a state initiates that prohibits or restricts exportation or importation of goods. They are motivated by economic, political, environmental or moral; reasons which are used as a protest against another practice of a country.

Currency Devaluation

This is the deliberate increase and decrease in the country's currency value in relation to its trading partners currencies. It takes place in a regime of the fixed exchange rate. Where the government sets the rate of currency exchange of another country. It takes place to correct an external persistent imbalance of trade deficits. When a currency of a given country is overvalued its prices tend to be high and thus imports are however cheaper are the export of a country tends to be relatively cheaper which leads to deficits. However, the situation is reversed when the currency is devalued.

Trade Restriction

Is a government policy which limits free goods and services to flow across the border. These restrictions are classified: Local exporters subsidies, lack of protection of copyright, government's direct procurement, licensing, technology transfer, or restriction of franchising, Policies of imports which are reflected in imports charges such as tariffs, quotas, customs practices and import licensing.

References

Lopus, J. (2013). Student handbook to economics (p. 56). New York: Infobase Learning.

Hinkelman, E. (2008). Short Course in International Payments. Petaluma: World Trade Press

Miller, E., & Miller, R. (1995). America's international trade. Santa Barbara, Calif.: ABC-CLIO.