International Trade/Entry Barriers

Non-tariff Barrier

Non-tariff Barriers
Quotas are a quantitative restriction on the import of a particular good
Value quotas are less common Most quotas on manufactured goods long prohibited by GATT

Embargo quota equal to zero

Non-tariff Barriers
Voluntary export restraints (VER) are agreements between two governments in which the government of the exporting country agrees to restrain the volume of its own exports.

Non-tariff Barriers
Tariff-rate quotas (TRQs), allow quantities below the quota to enter at low tariff rates. Once the quota is exceeded a higher tariff applies. WTO members are beginning to replace existing quotas with TRQs Quotas (on apparel and textiles) phased out by 2005
Exceptions are allowed

Non-tariff Barriers
Export subsidies Government procurement policies Health and safety standards Failure to protect intellectual property rights Labeling requirements Many more

More Non-tariff Barriers

Cartels (international)
Oil, Vitamins,

Rules and Regulations Border Tax Adjustments

Cartels
Cartels are international (e.g., OPEC), as opposed to trusts (e.g., Standard Oil Trust) Cartels exercise monopoly power Inefficiency results restricted output, raised price

Local Content Requirement

Specify that a minimum percentage of the value of a final good be produced domestically To sell a tractor or other capital good in Argentina, Brazil, Mexico, or South Korea, a foreign manufacturer must set up domestic assembly operations, and add a certain fraction locally

Border Tax Adjustments

WTO forbids most export subsidies, including rebates of domestic taxes Sole exception: rebate of indirect business taxes (IBT) to exporters e.g., US sales and excise taxes & VAT in EU Provision does not apply to direct taxes, such as income tax or corporate profits tax

Voluntary Import Expansion

US has insisted that Japan import more auto parts, semi-conductors and beef In some instances, Japan has agreed to import a certain minimum amount US-Japan trade much as a US export subsidy

Tariff Barrier

 This is barrier is in the form of duties, taxes, quotas etc. Because of this barrier, imports decrease and price of imported products increase which results in the fall in the demand giving boost to domestic products.

 Export Duty: Tax that is paid on goods leaving a country Import Duty: Tax that is paid on goods coming in a country

Transit Duty: Tax that is paid on goods crossing the national borders of a country

 Specific Duty: tariff of a specific amount of money that does not vary with the price of the good. These tariffs are vulnerable to changes in the market or inflation unless updated periodically

 Ad-Valorem: a set percentage of the value of the good that is being imported. Sometimes these are problematic, as when the international price of a good falls, so does the tariff, and domestic industries become more vulnerable to competition. Conversely, when the price of a good rises on the international market so does the tariff but a country is often less interested in protection when the price is high

 Compound duty: combination of specific duty and ad-valorem

 Revenue tariff: a set of rates designed primarily to raisemoney for the government. A tariff on coffee importsimposed by countries where coffee cannot be grown, forexample raises a steady flow of revenue

 Anti-dumping duty: tariff to increase the price of the imports to their original price so as to avoid dumping. Countervailing duty: additional duty imposed to offset the effect of concessions and subsidies given to the exporting country from its government

 Voluntary Constraint This is a type of international trade barrier wherein a country voluntarily restricts or stops imports from coming in. This is usually used to limit the competition that domestic industries will face with the coming in of imported goods.

Others Factors
Advertising Capital Control of resources Customer loyalty Distributor agreements Economy of scale Government regulations Intellectual property Predatory pricing Embargo