IN THIS UNITS MEANING OF TARIFFS, ADVANTAGE OF TRAFFIS , EFFECTS. MEANING OF QUOTA,ADVANTAGES,EFFECTS,EXCHANGE CONTROL ARE DISCUSSED

1. INTERNATIONAL BUSINESS
F. JOSEPHINE LENTA,
ASSISTANT PROFESSOR,
DEPARTMENT OF COMMMERCE,
COLLEGE OF SCIENCE AND HUMANITIES
SRM IST
RAMAPURAM

2. UNIT 3
 TARRIFS AND QUOTAS

3. Meaning of Tariffs:
 A tariff is a duty or tax imposed by the
government of a country upon the traded
commodity as it crosses the national
boundaries.
Tariff can be leviedboth upon exports and
imports. The tariff or duties imposed upon the
goods originating in the home country and
scheduledfor abroad are calledas the export
duties.

4. Types of Tariffs:
 Specific tariff
 Ad Valoremtariff
 Compound tariff
 Sliding scale tariff
 Revenue Tariff
 Protective Tariff.
 Non-discriminatory
 Discriminatory
 Generalandconventional tariff
 Maximumand minimumtariff
 Multiple Column Tariff.
 Retaliatorytariffs
 Countervailingtariffs.

5. QUOTA
A quota is a type of trade restriction where a
government imposesa limit on the number or the
value of a product that another country can import.
 For example,a government may place a quota
limiting a neighboring nation to importing no
more than 10 tons of grain

6. TYPES OF IMPORT QUOTAS:
Thesystem of import quotasmay be classifiedintofive major
groups:
 The tariff or custom quota
 The unilateral quota
 The bilateral quota
 The mixingquota
 Import licensing

7. Advantages of Tariff
 Protecting local industries
 Fair play
 Savingjobs
 Creation of employment
 Prevent dumping
 Expansion of economy
Disadvantages of Tariff
 Increases taxation
 Discourages import
 Reduces or eliminatesvariety
 Raises the price of imports
 Discourages competition

8. Advantages of a Quota:
 Foreign ExchangeImplication
 Precise Outcome
 Flexibility
Disadvantages of a Quota
 Corruption
 Monopoly
 Monopoly Growth
 Disortion of trade

9. Exchange Control:
 Exchangecontrols are government-imposedcontrols and
restrictions on private transactions conducted in foreign
currency. The government’smajor aim of exchangecontrol is to
manageor prevent an adversebalance of payments position on
national accounts.

10. Objectives of Foreign Exchange Control
 Correcting Balanceof Payments
 To Protect Domestic Industries
 To Maintain an OvervaluedRate of Exchange
 To Prevent Flight of Capital
 Policy of Differentiation