Barriers To Trade

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Barriers To Trade

  1. 1. Barriers to Trade Why do countries produce goods and services that could be more cheaply purchased from other countries?
  2. 2. Reasons <ul><li>To encourage local production </li></ul><ul><li>To help local firms export </li></ul><ul><li>To protect local jobs </li></ul><ul><li>Protect infant industries </li></ul><ul><li>Reduce dependency </li></ul><ul><li>Encourage local and foreign direct investment </li></ul><ul><li>Reduce balance of payment problems </li></ul><ul><li>Reduce or avoid dumping </li></ul>
  3. 3. Commonly used barriers <ul><li>Price based barriers- Ad valorem </li></ul><ul><li>Quantity limits-quotas- embargo </li></ul><ul><li>International price fixing- cartel </li></ul><ul><li>Financial limits- exchange control </li></ul><ul><li>Foreign investment controls-minority stakes, limiting profits etc </li></ul>
  4. 4. Tariffs <ul><li>Export tariff </li></ul><ul><li>Transit tariff </li></ul><ul><li>Specific duty </li></ul><ul><li>Ad valorem duty </li></ul><ul><li>Compound duty </li></ul><ul><li>dumping </li></ul>
  5. 5. Non – tariff barriers- rules , regulations and bureaucratic <ul><li>Quotas </li></ul><ul><li>Buy national restrictions </li></ul><ul><li>Customs valuation </li></ul><ul><li>Technical barriers </li></ul><ul><li>Counter trade </li></ul>

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