Quiz 9: Nontariff Barriers to Imports

Business

A non-tariff barrier to imports is a policy used to reduce the level of import than the normal tariff on imports. There are many forms of non-tariff barriers such as import quotas, discriminatory product standards and administrative red tape to harass importers of foreign products. Non-tariff barrier can reduce the level of imports by limiting the quantity of imports, increasing the cost of getting imports in to the market. Non-tariff barrier creates uncertainty about the conditions under which will be permitted. A voluntary export restraint is the different trade barrier. In this trade restriction, the importing country government forces the foreign exporting country to agree voluntarily restriction of the level of export to that country. This export restriction requires to cartel the level of export, restricting the sales and rising price. The most of the governments have imposed VER to protect their industries which have faced problem to compete against the foreign cheap goods. VER can be used to avoid the embarrassment of importing quotas or rising their own tariffs because by importing quotas and tariffs would violate their commitment to the international rules imposed by the WTO. VERs brings the importing country a bigger national gain than quotas or tariffs. Because by imposing VER, the importing country has faced the less amount of the lost than normal tariff, because of imposing VER, the foreign exporters charge higher price, that would reduce the level of the exported product in the importing country.

A non-tariff barrier to imports is a policy used to reduce the level of import than the normal tariff on imports. There are many forms of non-tariff barriers such as import quotas, discriminatory product standards and administrative red tape to harass importers of foreign products. Non-tariff barrier can reduce the level of imports by limiting the quantity of imports, increasing the cost of getting imports in to the market. Non-tariff barrier creates uncertainty about the conditions under which will be permitted. Product standards help to reduce the discrimination against imports. Sometimes government wants to protect local producers and provides some rules that can be met more easily by local products than by imported products. The product standards are prepared to fit local products but to require modifications to foreign products. The product standards can be higher for imported products which enforced more strictly. Product standards usually cannot raise tariff or tax revenues for the importing country. The product standards can be cause of the total welfare. A domestic content requirement means a product produced and sold in a country which has a specific minimum amount of domestic production value. Domestic content requirement user is trade protection method. It can create a barrier to import of the products that cannot meet the content rules. Sometimes they can limit the import of raw materials that they can use the domestic products.

A non-tariff barrier to imports is a policy used to reduce the level of import than the normal tariff on imports. There are many forms of non-tariff barriers such as import quotas, discriminatory product standards and administrative red tape to harass importers of foreign products. Non-tariff barrier can reduce the level of imports by limiting the quantity of imports, increasing the cost of getting imports in to the market. Non-tariff barrier creates uncertainty about the conditions under which will be permitted. The country US proposes that if any foreign apple exporting country exports apple to the country US market, the country has to use same harvest and techniques which are used by the country US. (a) To support the proposal of country US government, the representative would defend the new import regulation, by saying, that the harvest and techniques which are used by the country US maintain the high standard level for product quality and worker safety. So if any foreign country wants to export the product like apple, the country has to maintain same product quantity and worker safety. Due to this reason, the country US wants to impose the regulation on the foreign apple exporting country. (b) But the foreign reprehensive country opposes the country US regulation because. It would be more expensive for the production of the apples. If the foreign trade country would use the country US techniques, the foreign traded has faced unfair trade restriction, because the foreign country would produce the apples with less expensive techniques. But if they would agree with country US condition, they would face loss. So the foreign country would not agree with the restriction.