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• • • • • Meaning and Concept Significance of Nontariff barriers Example of Non-tariff barriers Impact of Non-tariff barriers in Nepal Conclusions and suggestions
Meaning of Nontariff Barriers
• Non-tariff barriers are trade barriers that restrict imports but are not in the usual form of a tariff. • The Government imposed the non –tariff barriers to protect and promote domestic product. • Non-tariff barriers are restrict trade in the form of non-monetary or non financial. • Government use nontariff regulation and practices to affect directly the quantity of imports and exports.
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Significance of nontariff barriers
• Protecting consumers • National security • To protect and promote of the domestic industries • Protecting the job opportunities • Essentiality • Protecting of culture • Retaliation • Political influence
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A subsidy is a government payment to a domestic producer Take Many form including cash grants, low interest loans and Government equity participation in domestic firm. Agriculture tends to be one of the largest beneficiaries of subsidies in Most countries Nonagricultural subsidies are much lower ,but they are still significant
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• In 2002,the European union was paying $ 43 million annually in farm subsidies • Japanese have a long history of supporting • Allow framers to stay in business • Encourage Countries to overproduce • Reduce international trade in agriculture products
Japan is not a particular good environment for growing wheat, wheat produced on large fields in the dry climates of North America, Australia ,and Argentina is far cheaper and much higher quality than anything produced in Japan
• Quota is direct restriction the Quantity of some good that may be imported into a county • Import Quota and Export Quota • Import quota can raise price for both domestic ally produced and the imported goods • Example this happened in the U.S sugar industry ,where a Quota system has limited
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• If the industry lacks the capacity to meet demand • For example ,the united states has a Quota on cheese imports
Local content Requirement
• A local content requirement is a requirement that some specific fraction of good be produced domestically • Used developing counties to shift their Manufacturing base • Developed countries try to protect local jobs and industry from foreign competition(like import quota)
• Government agency give preference • Benefits producers not consumers
• Informal administrative polices to restrict import • Bureaucratic rules designed to make it difficult for imports to enter a country • Like Netherland exports tulip bulbs to almost every country in world except Japan
• Antidumping are designed to punish foreign firm that engage in damping • Protect domestic producers from unfair competition • South Korea Manufactures of semiconductors LG silicon and Hyundai Electronic ,were accused of selling dynamic random access memory chips in the U.S market at below their cost of production
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• Dumping is variously defined as selling goods in a foreign market at below their costs of production ,or selling goods in a foreign market at below fair market value.
• Packaging standards • Testing • Health standards
• Do u think Nepal has imposed Non-tariff barriers to protect Nepalese business sector ? • In which sector Nepal has the comparative advantage ?
Impact of Non-tariff barriers
• Non tariff barriers imposed by china is hurting Nepali exports • Non transparent and frequently changing customs rules ,non cooperative attitudes of Chinese customs official • Readymade garments • Carpets and woolen goods • Honey • Non tariff barriers imposed by India Neapli exports also affects
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• Nepal imports all types of Chinese goods from raw material to finished products • Chinese products are also displacing traditional handicraft and cottage industries how Chinese furniture now dominated department stores ,offices and hotel • Sub standards Chinese goods being the names of established international brands have hampered their business
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• Awareness among Nepal entrepreneurs about zero tariff goods • Trade infrastructure such as roads ,warehouse and dry ports
• Non –tariff barriers have effects similar to those of tariffs they increase domestic prices and impede to protect selected producers as the expense of domestic consumers • The Non-tariff are less transparent ,difficult to identify and their impact on exporting countries is almost impossible to quantities • Advanced countries like the USA who were high priests of free trade increasingly resort to several non-tariff ,particularly against the developing countries and certain countries like Japan.
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• The policymakers have preferred to use nontariffs rather than tariffs in recent years • Political process generate larger amount of non-tariff barriers relative to tariffs • Non-tariff seriously affect many exporting countries