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National College of Business Administration

&Economics

Assignment
Subject: International
Business
Topic: Barriers to the International Business
Presented To:

Prof. Waseem Saab

Presented By:

Muhammad Fiaz Sarwar

Roll No. 3406


M.sc

Project Management Semester-III

Table of Contents
Introduction

What is Trade ?

Barriers to International trade

Types of Barriers

Tariff & Non-Tariff Barriers


Economic Barriers

Governmental influences on Trade 7


Benefits of Trade Barriers

Introduction
The voluntary exchange of goods and services among people and countries.
Trade and voluntary exchange occur when buyers & sellers freely and willingly
engage in market transactions.When trade is voluntary and non-fraudulent; both
parties benefit and are better off after the trade than they were before the trade.
The problems in the ways of trade are called barriers there are many kinds of the
barriers but main are these Tariff barriers non-tariff barriers and economic barriers.
What is Trade?
The voluntary exchange of goods and services among people and countries. Trade
and voluntary exchange occur when buyers & sellers freely and willingly engage in
market transactions.
Types of the Barriers:
These are the main types of the barriers;
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Tariff Barriers
Non Tariff Barriers
Economic Barriers
Governmental influences on Trade

Tariff Barriers

Directly affect the prices of goods traded

Also called Duty or tax levied on goods traded internationally.

Most common type of trade control


Specific duty; Ad - Valorem duty; Compound duty.

Non - Tariff Barriers


Subsidies: Direct assistance to companies, making them more
competitive.

Tied Aids: Loans to other countries, a part of which is spend in donor


country. E.g. Infrastructure, telecommunication.

Minimum sale price: Goods sold at a price set by authorities after


clearances.

Quotas: Limiting the quantity of goods imported or exported at a


given time frame.

Embargoes: Prohibits all forms of trade from a country or a category of


goods.

Buy - Local: Favoring domestic producers or goods of local origin.

Specific Permissions: import or export license.

Preventing Unemployment
Economic employment of full employment
Gaining jobs by limiting imports
Other countries may retaliate
Impact on other industries
Protecting Infant Industries

Government should shield an emerging industry from foreign competition


by guaranteeing it a large share of domestic market until it is ready to
compete.
Efficiency gains take time

Economies of scale & experience curve translate into higher productivity

Benefits include higher employment, lower social costs and higher tax
revenues

Maintaining essential industries


Protect essential domestic industries

Financial inclusion of necessities


Rural penetration at affordable prices

Maintaining competitive advantages in essential industries.


Water, electricity, banking, railways, etc.

Dealing with unfriendly countries


National defense Trade of strategic goods - data encryption technology,
arms & ammunitions, banking, etc. Used as a method to achieve political
objectives
Economic Trade Barriers

The most common types of trade barriers are tariffs and quotas.

A tariff is a tax on imports (imports are goods purchased from other


countries and exports are goods sold to other countries).

A quota is a specific limit placed on the number of imports that may enter a
country.

Another type of trade barrier is an embargo.

A complete trade block for a political purpose

Benefits of Trade Barriers

Most barriers to trade are designed to prevent imports from entering a


country.
Trade barriers provide many benefits:
protect homeland industries from competition
protect jobs
Help provide extra income for the government.
Increases the number of goods people can choose from.
Decreases the costs of these goods through increased competition

Costs of Trade Barriers

Tariffs increase the price of imported goods.


Less competition from world markets means there is an increase in the price.
The tax on imported goods is passed along to the consumer so the price of
imported goods is higher.

Thank You