Nontarrif Barriers to Trade

Nontarrif Barriers to Trade - TRADERESTRICTIONS Non-tariff...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
TRADE RESTRICTIONS   Non-tariff Barriers (NTB)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Non-tariff Barriers Quotas. Voluntary export restraints. International cartels. Domestic content requirements. Governmental procurement policies. Administrative, technical and regulatory barriers.
Background image of page 2
Quotas Quota - When an importing country limits the total amount of a particular good that can be imported. An Import Quota tends to lead to higher prices increase producer surplus decrease consumer surplus lower net national social welfare because the loss to customers is greater than the gain to producers.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Comparison Between Quotas and  Tariffs   Governments don't get to collect the revenues in the case of quotas unless they auction off the quota licenses to the highest bidder. Hence, the NSW loss in the case of quotas is greater than that in the case of a quota-equivalent tariff. With a given import quota, an increase in demand will lead to increased (inefficient) domestic production and higher prices than in the case of an import tariff and hence to greater NSW losses. Domestic competitors of imported good however prefer quotas to tariffs, because the effect of a quota is certain; not so the effect of a tariff .
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Voluntary Export Restraints   When the exporting country ‘voluntarily’ limits the total amount of a good that is being exported. Worse than a quota, since the price increases definitely go to the foreign exporters (and not even to the domestic country's importing firms)!!
Background image of page 6
Other Non-tariff Barriers International Cartels : Collusion by a small group of international producers leading to artificially high profits
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 13

Nontarrif Barriers to Trade - TRADERESTRICTIONS Non-tariff...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online