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International Trade Barriers Work

International Trade Barriers Work

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Published by Abhijit Jadhav

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Published by: Abhijit Jadhav on Sep 23, 2009
Copyright:Attribution Non-commercial


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Economists generally believe that trade barriers decrease overall economicefficiency. In theory, free trade expects removal of all such barriers, exceptingthose considered necessary for well-being or security of a country or nation-State.In practice, though, even countries promoting free trade heavily subsidize someof their own industries, especially agriculture and steel. In recent years, free tradeagreements between two or more nations have become common. For instance,North American Free Trade Agreement (NAFTA), South Asia Free TradeAgreement (SAFTA), European Free Trade Association, European Union (EU),Union of South American Nations.Other variants of trade barriers result from differences in culture, customs,traditions, laws, language and currency. Countries and nation-States do differfrom one another and do not follow common and uniform laws, procedures andcustoms. According to an analyst, current debate and differences over free tradeinclude such barriers as:1. Intellectual property infringement
including copyright, patent andtrademarks.2. Customs procedures that are not uniformly applied.3. Lack of competitive bidding for foreign government tenders.
4. The application of direct or indirect subsidies by a foreign government in favourof domestic suppliers.5. Burdensome certification and testing requirements that are not required bydomestic manufacturers.6. Influence pedalling
A corporate entity or country is interfering with fair trade
practices at other’s expense.
 7. Bribery, corruption and requests for payoffs
When foreign bribery preventsyou from competing fairly on the basis of price, quality or service.
Trade barriers work because they are effective in protecting a country’s own
interests; both industry and services sectors do need protection and promotion so
that they continue to make their contribution to the country’s economy and well
being, keep workers employed and increase country’s prosperity without undue
competition from other countries. But, in global context, trade barriers orprotective measures may not be so beneficial as some economic protections aremore costly than others and can trigger a trade war.As far as subsidies are concerned, poorer countries do not have the ability toraise subsidies and are more vulnerable than richer countries in trade wars. Byraising protections against dumping of cheap products, it risks making the producttoo expensive and beyond the means of its people.

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