Differentiate between the barriers to the foreign market entries. Pg25
There are tariff barriers and non-tariff barriers that a government may use in order to protect its economy or restrict the flow of imports into its country.
Tariff barriers focus more on the measures a government puts on financial levies on the import of goods in the form of taxes or duties(tariffs). These may also be used as a means to generate revenue by the government.
Types of tariffs:
Ad valorem duties: payable on the value of goods.
Specific duties (sin tax): payable on the volume of goods (in addition to normal customs duties).
Environmental levies
Fuel and ordinary levies
Non-tariff barriers on the other hand are effective trade restrictions on the free flow of goods. Any measure put in place besides tariffs that affects international trade through quantitative government restrictions. In other words they usually resilt from economic policies that try to protect sectors competing with imports.
Types of non-tariff barriers:
Import license: products only allowed to be imported if they acquire the necessary import licence.
Quotas: limits the quantity of a certain category of good that may enter the country.
Product standards (quality and health): Government could specify certain standards for imported goods, mainly in respect of edible products.
Import deliberate bureaucracy
Prohibitive goods: government stops certain products from being imported. These products are usually of a military nature and can potentially cause harm.
Embargoes and sanctions: government can make sure that certain products aren’t imported.
Special import restrictions: certain goods may be restricted due to the nature of the goods, e.g. second hand goods.
Local contents
Fully justify the use of non-tariff barriers as an instrument by government to regulate trade.pg28 and internet
-Non-tariff barriers (NTB) used by government to protect sectors competing with imports or to support export sectors.
-Restricts trade on the free flow of goods
-Some non-tariff trade barriers are permitted in very limited circumstances, when they are deemed necessary to protect health, safety, or sanitation, or to protect depletable natural resources.
-NTBs are not directly related to foreign economic regulations, but nevertheless they have a significant impact on foreign-economic activity and foreign trade.
- For controls - to respect second hand goods as well as certain machininery equipment
-Some measures efectively isolate a country from the rest of the world – to force compliance to certain specifications.
-certain goods may not be allowed eg prohibitive goods – which are normally of a military nature that can result in endangering life and potentially even resulting in the loss of life.
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