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Tariff & Non- Tariff
 barriers to Trade

       Unit 3
      Chapter 1
Introduction:
   International Trade policies deals with the
    policies of the national governments relating to
    exp...
Instruments of Trade Policy:
   Broadly classified into…..
       Tariff
       Non-Tariff
Tariff Barriers
   What are tariff barriers?
       Refers to the tax imposed on the goods when they
        enter or le...
Types of Tariffs:
   On the basis of Purpose:
       Revenue Tariff:
          To provide state with the revenue.

    ...
   On the Basis of Origin and Destination:
       Ad Valorem Duty:
          Levied as the percentage of the total

   ...
   On the Basis of Country-wise
    Discrimination:
       Single Column Tariff:
          A uniform rate of duty is im...
Who Gain from Tariff?
   Government of the importing country earns
    in the form of the revenue.
   Industries of the ...
Who are adversely affected?
   Consumers

   Industries of the exporting country.
Other Impacts of Tariff Barriers
Tariff Barriers tend to Increase:
Tariff Barriers tend to Increase:
1. Inflationary press...
Non- Tariff Barriers
 Non-Tariff     measures      include  all
 measures, other than tariffs, the effect
 of which is to ...
Different Types of Non-Tariff
        Barriers:



(1) Specific Limitations on Trade:
(1) Specific Limitations on Trade:
1...
(2) Customs and Administrative Entry Procedures:
(2) Customs and Administrative Entry Procedures:
1. Valuation systems
1. ...
(4) Charges on imports:
 (4) Charges on imports:
1. Prior import deposit subsidies
 1. Prior import deposit subsidies
2. A...
Impact of NTBs:
   Have emerged as potent Protectionist
    tool.

   It being less transparent, its difficult to
    id...
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  1. 1. Tariff & Non- Tariff barriers to Trade Unit 3 Chapter 1
  2. 2. Introduction:  International Trade policies deals with the policies of the national governments relating to exports of various goods and services in various countries either on equal terms and conditions or on discriminatory terms and conditions.  Trade policies also aim at protecting the domestic industry from the competition of the advanced countries through imposing quotas and build competencies by providing subsidies.
  3. 3. Instruments of Trade Policy:  Broadly classified into…..  Tariff  Non-Tariff
  4. 4. Tariff Barriers  What are tariff barriers?  Refers to the tax imposed on the goods when they enter or leave the national frontier or boundary.  What is the purpose of tariffs?  To protect the domestic industry by increasing the cost of imported goods.  Example : GoI imposed tariffs to protect domestic automobile industry, sugar industry, cement industry and steel industry.
  5. 5. Types of Tariffs:  On the basis of Purpose:  Revenue Tariff:  To provide state with the revenue.  Levied on luxury goods.  Protective Tariff:  To maintain and encourage those branches of home industry protected by the duties.
  6. 6.  On the Basis of Origin and Destination:  Ad Valorem Duty:  Levied as the percentage of the total value of the imported common duty.  Specific Duty:  Levied per physical unit of the imported commodity.  Compound Duty:  Levied a percentage ad valorem duty plus a specific duty on each unit of the commodity. Eg. 1 lac + 10% of the price.
  7. 7.  On the Basis of Country-wise Discrimination:  Single Column Tariff:  A uniform rate of duty is imposed on all similar commodities irrespective of the country from which they are imported.  Double Column Tariff:  Two different rates of duty have been imposed.  Triple Column Tariff:  Two or more tariff rates are levied on each category of commodity.
  8. 8. Who Gain from Tariff?  Government of the importing country earns in the form of the revenue.  Industries of the importing country would find market for their products as the imported goods will be expensive.  Jobs in the domestic markets are saved.  Business for the ancillary industry, servicing, market intermediation etc. is also protected.
  9. 9. Who are adversely affected?  Consumers  Industries of the exporting country.
  10. 10. Other Impacts of Tariff Barriers Tariff Barriers tend to Increase: Tariff Barriers tend to Increase: 1. Inflationary pressures 1. Inflationary pressures 2. Special interests’ privileges 2. Special interests’ privileges 3. Government control and political considerations in 3. Government control and political considerations in economic matters. economic matters. Tariff Barriers tend to Weaken: Tariff Barriers tend to Weaken: 1. Balance-of-payments positions 1. Balance-of-payments positions 2. Supply-and-demand patterns 2. Supply-and-demand patterns 3. International relations (they can start trade wars) 3. International relations (they can start trade wars) Tariff Barriers tend to Restrict: Tariff Barriers tend to Restrict: 1. Manufacturer’ supply sources 1. Manufacturer’ supply sources 2. Choices available to consumers 2. Choices available to consumers 3. Competition 3. Competition
  11. 11. Non- Tariff Barriers Non-Tariff measures include all measures, other than tariffs, the effect of which is to restrict imports, or to significantly distort trade.
  12. 12. Different Types of Non-Tariff Barriers: (1) Specific Limitations on Trade: (1) Specific Limitations on Trade: 1. Quotas 1. Quotas 2. Import Licensing requirements 2. Import Licensing requirements 3. Proportion restrictions of foreign to 3. Proportion restrictions of foreign to domestic goods (local content requirements) domestic goods (local content requirements)
  13. 13. (2) Customs and Administrative Entry Procedures: (2) Customs and Administrative Entry Procedures: 1. Valuation systems 1. Valuation systems 2. Antidumping practices 2. Antidumping practices 3. Documentation requirements 3. Documentation requirements 4. Fees 4. Fees (3) Government Participation in Trade: (3) Government Participation in Trade: 1. Government procurement policies 1. Government procurement policies 2. Export subsidies 2. Export subsidies 3. Countervailing duties 3. Countervailing duties 4. Domestic assistance programs 4. Domestic assistance programs
  14. 14. (4) Charges on imports: (4) Charges on imports: 1. Prior import deposit subsidies 1. Prior import deposit subsidies 2. Administrative fees 2. Administrative fees 3. Special supplementary duties 3. Special supplementary duties 4. Import credit discriminations 4. Import credit discriminations 5. Border taxes 5. Border taxes (5) Others: (5) Others: 1. Voluntary export restraints 1. Voluntary export restraints 2. Monetary Barriers 2. Monetary Barriers
  15. 15. Impact of NTBs:  Have emerged as potent Protectionist tool.  It being less transparent, its difficult to identify and quantify its impact.
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