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Tariff And Non Tariff Barriers Essay

1043 words - 5 pages

International Trade is the branch of economics concerned with the exchange of goods and services with foreign countries. In the context of globalization, International trade has become an even more important topic now that so many countries have begun to move from state-run to market-driven economies. Tariff and non-tariff barriers play a large part in this process.Tariff BarriersTariffs are among the oldest forms of government economic intervention. They are most commonly used as taxes on imports into a country or region. They are put into practice for two clear economic purposes. They provide revenue for the government and they improve economic returns to firms and suppliers to domestic ...view middle of the document...

They are a means of keeping foreign goods out of the domestic market, while following the multiparty agreements that the country has signed through the World Trade Organization. Two common examples are quotas and counter trade, which even though they are considered non tariff barriers, have the same effect as a tariff, but are only imposed in specific circumstances. Some non-tariff trade barriers are explicitly permitted in very limited circumstances, when they are deemed necessary to protect health, safety, or sanitation, or to protect natural resources.Non-tariff barriers to trade can be:* State subsidies, procurement, trading, and ownership.* National regulations on health, safety, employment.* Product classification.* Quotas.* Foreign Exchange: controls and multiplicity.* Over elaborate or inadequate infrastructure.* 'Buy national' policy.* Intellectual property laws (patents and copyrights).* Bribery and corruption.* Unfair customs procedures. (Wikipedia.com, 2005B)GlobalizationA critical shift is occurring in the world economy. The world is moving quickly away from a world in which national economies are mostly reliant on goods from within their own country; stay isolated from each other by barriers trade across national borders, and by national differences in government regulation, culture, and business systems. It is moving toward a world where barriers to trade across national borders are dropping, perceived distance is shrinking due to advances in transportation and telecommunications technology, and national economies are merging into an interdependent global economic system. "Most economists agree that trade barriers are detrimental and decrease overall economic efficiency. Free trade involves the removals of all such barriers, except perhaps those considered necessary for health or national security." (Biography.ms, no date).Although there are many definitions of globalization, many possible aspects that can have an...

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