Premium Essay

Barriers to International Trade- Non-Tariff Barriers and Infrastructure on Freight Transportation

In: Business and Management

Submitted By akshaypoonia
Words 3069
Pages 13
Barriers to International Trade- Non-Tariff Barriers and Infrastructure on freight transportation


Average applied tariffs on industrial products have declined from 15.5 per cent in 1990 to 7.9 per cent in 2003.[1] Yet, the volume of international trade is still less than one would expect from observed differences in factor endowments, tastes and technology between countries (Trefler, 1995). A possible explanation of the missing trade is non-tariff barriers to trade, including transport costs and other costs related to searching for international suppliers or customers, entering into contracts and shipping the goods or services from the domestic producer to the foreign customer. These transaction costs have several dimensions. First, there are the direct monetary outlays on communication, business travel, freight, insurance and legal advice. These are partly determined by the physical and cultural distance between the trading partners, but also the quality of infrastructure and the cost and quality of related services. EXAMPLE

A second dimension of transaction costs is time. The proverbial "time is money" suggests a linkage between monetary outlays and the time dimension, but time also plays a role in its own right. This is particularly the case in industries that have adopted just-in-time business practices and have an international supply network. Just-in-time business practices imply that producers have small inventories of intermediate goods and the entire production process would come to a halt if one input was missing. Under such circumstances delays in delivery of intermediate inputs would have a disproportionate impact on the importing firms' total costs.[2] In fact, if the production plant has to stop production due to a missing part, emergency transport at a cost that by far exceeds the price of the good transported is not...

Similar Documents

Premium Essay

International Trade

...SATAKUNNAN AMMATTIKORKEAKOULU SATAKUNTA UNIVERSITY OF APPLIED SCIENCES Anna Tulinen FACING THE CHALLENGES IN EXPORTING TO RUSSIA SCHOOL OF BUSINESS RAUMA Degree Programme in International Business and Marketing Logistics 2007 TIIVISTELMÄ VENÄJÄN VIENNIN HAASTEIDEN KOHTAAMINEN Tulinen, Anna Satakunnan ammattikorkeakoulu International Business and Marketing Logistics Liiketalouden Rauman yksikkö Tammikuu 2007 Tanhua, Daniela Sivumäärä: 85 Avainsanat: kansainvälinen kauppa, vienti, Venäjä Opinnäytetyön aiheena on Venäjän viennin ongelmien tutkiminen. Työ pitää sisällään teoreettisen osuuden, jonka pohjalta empiirinen tutkimus on tehty. Tarkoituksena oli selvittää minkälaisia ongelmia pienet ja keskisuuret suomalaiset yritykset kohtaavat viedessään tuotteitaan Venäjälle. Venäjän WTO-jäsenyysneuvottelut ovat loppuvaiheessaan ja työn tarkoituksena on myös eritellä niitä etuja, joita tuo jäsenyys saattaa tuoda mukanaan Venäjän kauppaa käyville yrityksille. Teoreettinen osuus kuvailee kansainvälistä kauppaa ja vientiä. Osassa, joka käsittelee kansainvälistä kauppaa, kuvaillaan lyhyesti kansainvälistä markkinointi ympäristöä sekä luetellaan kansainvälisen kaupan esteet ja ne syyt, joiden mukaan valtiot pyrkivät estämään kansainvälistä kauppaa. Kappaleen loppu keskittyy käsittelemään logistiikan tärkeyttä ja ongelmia kansainvälisessä kaupassa. Viennin osuudessa käsitellään viennin peruskäsitteitä sekä kansainvälisen kaupan dokumentaatiota ja tullin roolia. Viitekehys......

Words: 25512 - Pages: 103

Premium Essay

Research Paper

...Free Trade Agreement (FTA) FTA & Trade Blocs are the same thing but Trade Bloc is the wider picture. FTA * An agreement between two or more countries to create a free trade area; that us an area in which all barriers to trade among them are removed or modified, although sometimes only for certain specified goods and services. * All barriers -> often not all the barriers are removed * Trading blocs may create FTA with other countries Trade Bloc * It is formed by an agreement among countries to establish links through the movement of goods, services, capital and labor across borders. * A large free trade area or free trade area formed by one or more tax, tariff and trade agreements. * It is the outcome of an agreement between countries to facilitate the movement of goods, services, labor and capital across borders. * Trade blocs can lead to: * Lower financial transaction costs * Lead to economies of scale…via larger markets * Result in cheap cross border transaction costs * Provide greater transparency…via new accountabilities and uniformity of regulations and procedures * Benefits of trade bloc * Trade facilitation via assisting Foreign Direct Investment * An increase in foreign direct investment results from trade blocs and benefits the economies of participating nations. * Lager markets are created, resulting in lower costs to manufacture products locally. *......

Words: 3863 - Pages: 16

Premium Essay


...between export marketing and export selling. By attending trade shows and participating in trade missions, company personnel can learn a great deal about new markets. Governments use a variety of programs to support exports, including tax incentives, subsidies, and export assistance. Governments also discourage imports with a combination of tariffs and nontariff barriers. A quota is one example of a nontariff barrier. Export-related policy issues include the status of foreign sales corporations (FSCs) in the United States, Europe’s Common Agricultural Policy (CAP), and subsidies. Governments establish free trade zones and special economic zones to encourage investment. The Harmonized Tariff System (HTS) has been adopted by most countries that are actively involved in export-import trade. Single-column tariffs are the simplest; two-column tariffs include special rates such as those available to countries with normal trade relations (NTR) status. Governments can also impose special types of duties. These include antidumping duties imposed on products whose prices government officials deem too low and countervailing duties to offset government subsidies. Key participants in the export-import process include foreign purchasing agents, export brokers, export merchants, export management companies, manufacturers’ export agents, export distributors, export commission representatives, cooperative exporters, and freight forwarders. A number of export-import payment methods......

Words: 8210 - Pages: 33

Premium Essay

International Business

...OUTLINE FOR AN INTERNATIONAL BUSINESS PLAN Please type your plan single-spaced. The first stage in developing an international business plan is to undertake a preliminary country analysis. Presented below are four separate sections to be completed for collection and analysis of market data and preparation of the plan: (1) Analysis: Cultural Environment; (2) Analysis: Economic; (3) Analysis: Market and Competitors; and (4) International Business Plan. The headings in each section are general and intended to provide direction to areas to explore for relevant data. Heading topic area may be emphasize or de-emphasized, depending on the nature of the firm’s product and the country being targeted. Some topic headings are unimportant for some countries and can be ignored. In the material that follows, “product” can refer to products or services. CULTURAL ANALYSIS The data obtained for this section provides vital information to guide development of the business plan and to support managers in understanding specific cultural dimensions of the country. Such information is useful to ensure the firm is effective in both developing the plan and interacting with the target market. Hence the information developed for this section serves a dual purpose both in the early stages of developing the plan and in executing the plan through interactions with country nationals. The information in this section constitute more than simple facts. Managers responsible for developing and executing the......

Words: 2244 - Pages: 9

Premium Essay


...ITALY COUNTRY PROFILE INTERNATIONAL RETAILING (INT 322) Contents Background Background Italy, officially the Italian republic is a Unitary Parliamentary Republic situated in South Central Europe. It borders other European giants such as France, Switzerland and Austria. The territory of Italy covers some 301,338 km2 (116,347 sq mi) and is influenced by a temperate seasonal climate. With 60.8 million inhabitants, it is the fifth most populous country in Europe, and the 23rd most populous in the world. Rome is the capital city of Italy, which has been the religious capital of the Western Civilization, as the Capital of the Roman Empire. In the late 19th century, through World War I, and to World War II, Italy possessed a colonial empire. Modern Italy is a democratic republic. It has been ranked as the world's 24th most-developed country and its has been ranked in the world's top ten in 2005. Italy enjoys a very high standard of living, and has a high GDP per capita.  It is a founding member of what is now the European Union and part of the Euro zone. Italy is also a member of the G8, G20 and NATO. It has the world's third largest gold reserves, eighth largest nominal GDP, tenth highest GDP (PPP) and the sixth highest government budget in the world. It is also a member state of the Organisation for Economic Co-operation and Development, the World Trade Organization, the Council of Europe, the Western European Union and the United Nations. Italy has the......

Words: 2808 - Pages: 12

Premium Essay

Essay on International Trade and Fdi

...College of 2-1-2011 ESSAYS ON INTERNATIONAL TRADE AND FOREIGN DIRECT INVESTMENT Wanasin Sattayanuwat University of Nebraska - Lincoln, Follow this and additional works at: Part of the Business Commons Sattayanuwat, Wanasin, "ESSAYS ON INTERNATIONAL TRADE AND FOREIGN DIRECT INVESTMENT" (2011). Dissertations and Theses from the College of Business Administration. Paper 18. This Article is brought to you for free and open access by the Business Administration, College of at DigitalCommons@University of Nebraska Lincoln. It has been accepted for inclusion in Dissertations and Theses from the College of Business Administration by an authorized administrator of DigitalCommons@University of Nebraska - Lincoln. ESSAYS ON INTERNATIONAL TRADE AND FOREIGN DIRECT INVESTMENT by Wanasin Sattayanuwat A DISSERTATION Presented to the faculty of The Graduate College at the University of Nebraska In Partial Fulfillment of Requirements For the Degree of Doctor of Philosophy Major: Economics Under the Supervision of Professor Craig R MacPhee Lincoln, Nebraska February 2011 ESSAYS ON INTERNATIONAL TRADE AND FOREIGN DIRECT INVESTMENT Wanasin Sattayanuwat, Ph.D. University of Nebraska, February 2011 Advisor: Professor Craig R MacPhee This dissertation comprises three separate essays on international trade and foreign......

Words: 9587 - Pages: 39

Premium Essay

International Business

...International trade is the exchange of capital, goods, and services across international borders or territories.[1] In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on the rise in recent centuries. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance of globalization. Without international trade, nations would be limited to the goods and services produced within their own borders. International trade is, in principle, not different from domestic trade as the motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not. The main difference is that international trade is typically more costly than domestic trade. The reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or culture. Another difference between domestic and international trade is that factors of production such as capital and labor are typically more mobile within a country than across countries. Thus international trade is mostly......

Words: 4951 - Pages: 20

Premium Essay

World Trade Organisation

...GANGAN 14 NEHA GAONKAR 15 INDEX 1. WORLD TRADE ORGANISATION  GATT  Principles of WTO  Objectives & Function 2. INDIA & WTO 3. INDIAN ECONOMY 4. INDIAN AGRICULTURE  Agricultural Trade  Agricultural Support Policies  Importance Of Indian Agriculture 5. AGREEMENT ON AGRICULTURE  The Three Boxes: Green, Amber and Blue  Trend In Pattern Of Consumption  Implication Of Agreement : Short Term and Long Term 6. WTO & INDIAN AGRICULTURE  India’s Commitment  India’s Agricultural Trade Under WTO Regime 7. A STUDY & ITS FINDINGS 8. SUGGESTIONS 9. BIBLIOGRPHY ACKNOWLEGEMENT We would like to acknowledge and express our sincerest gratitude for the efforts and timely guidance of our professor Mrs. Neelam Shetty of Managerial Economics for providing us the opportunity to study the impact of WTO agreements on the Indian economy especially focused on the agricultural sector. We would also like to thanks and express our gratitude towards professor Mr. Agnelo Menezes of economics from the Bachelors of Arts faculty and his student from XRCVC Master Prashant Lindayat. Each and every team member gave in his best to make sure that this report has all the necessary inputs and is completed on time. We definitely had a knowledgeful and enriching experience. WORLD TRADE ORGANISATION The WTO provides a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all, thus......

Words: 12777 - Pages: 52

Premium Essay


...Spanish as a second language to maintain a successful business in Argentina is a must. Learning Spanish will show Argentina businesses and their leaders that time was taken out to learn their language to communicate. Business leaders in Argentina depend on establishing and maintaining a great, personal relationship in order for businesses to compete and flourish in the economy. Just like a U.S. business, firms need good relationships with other business leaders or other firms to keep their own business flowing and producing goods or services. Argentine customs with holding business conversations are right in tune with U.S. business meetings or conversations. The greetings, handshakes, eye contact, punctuality, and the ability to maintain a non-business conversation can “make or break” any firm looking to do business here. There are two very important facts that this U.S. firm should know about Argentine conversations. The first is a title; way you address someone is extremely important. Argentinians may find it disrespectful if you don’t address elderly correctly, or people in their careers or professions in the...

Words: 3054 - Pages: 13

Premium Essay

Inernational Business Notes

...International Business Exam Chapter 1 Notes   Domestic vs International Business * Business: is the manufacturing of goods or services in order to make a profit * Term “trade” is used interchangeably with business * Transactions: exchange of things of value   * Domestic Business: business that transacts mainly in the country it was base din * ie owned by Canadians, in Canada, selling to Canadians (Rare) * International Business: economic system of transactions conducted between businesses in different countries   * Domestic Transaction: between 2 Canadian companies * International Transaction: between Canadian + non Canadian company   * Domestic Market: the customers of a business who are in the same country as the business * Foreign Market: the customers of a business who are in a different country as the business   * 5 Ways for businesses to must be international * MUST own retailers or distributors in another country * MUST own manufacturing plant in another country * MUST export to other countries * MUST import from others * MUST invest in other country businesses   * Trading Partner: Canada businesses make relationship with businesses in another country, so they would be Canada’s trading partner.   History of Canadian Trade * European Trade * 1700s – trades grew fast after permanent Canadian settlement * Demand for raw materials (beaver pelts, fish,......

Words: 12172 - Pages: 49

Premium Essay

Deloitte Logistics Report 2012

...Logistics Sector Present situation and way forward January 2012 2 Contents About Deloitte About ICC Overview I. Challenges faced by the Logistics industry in India II. Impact of challenges faced III. The way forward Bibliography Websites Contacts 4 5 6 8 13 14 16 18 19 Logistics Sector Present situation and way forward 3 About Deloitte Deloitte is one of the largest professional services organizations in the world with a worldwide presence of over 182,000 professionals in over 150 countries, with $28.8 billion in annual revenue (FY11). Deloitte’s global presence is highlighted below. the right combination of local insight and international expertise. Deloitte in India provides a full range of management consulting, financial advisory services, Accounting, Tax and IT solutions delivery to clients, tailored to Deloitte: Global network - 150 countries : 182,000 people Europe 297 offices in 47 countries Key Offices: London, Frankfurt, Paris, Rome, Dusseldorf, Madrid, Moscow, Prague Asia Pacific 113 offices in 26 countries Key Offices: Pakistan, Singapore, Thailand, Vietnam, Indonesia North America 131 offices 2 countries Key Offices: New York, San Francisco, Los Angeles, Denver, Toronto, Montreal South America 69 offices in 28 countries Key Offices: Sao Paulo, Mexico City, Buenos Aires, Santiago, Caracas Africa & Middle East 46 offices in 35 countries Key Offices: Johannesburg, Cape Town, Kenya, Tel Aviv India 15000......

Words: 6051 - Pages: 25

Free Essay

International Business

...International Business- Dr. R. Chandran 1. International Business: Meaning And Scope Interdependency is a natural phenomenon; nations, living beings and companies cannot totally depend on themselves. It is the major driving force for international business. Learning value: This chapter covers the essential aspects, 1. 2. 3. 4. 5. Definition of international business Emergence of developing nations in international business Motives of international business from companies and nations Fundamental differences between Domestic and International business Few successful organizations in Domestic & International business International business: Meaning and Scope In the post independence era, more than half-century Indian entrepreneurs concentrated on domestic operations and a surplus production was exported. The physical movement of goods, called EXPORT cannot represent International business. International business is defined as “any commercial transaction-taking place across the boundary lines of a sovereign entity”. It may take place either between countries or companies or both. Private companies involve themselves in such transactions for revenue, profit and prosperity. If governments are involved, they need to maintain their image, dependency and economic growth. Sometimes economic ties are strengthened through such transactions. These transactions include investments, physical movements of goods and services, transfer of technology and manufacturing. Today every......

Words: 70922 - Pages: 284

Premium Essay

Ups : Strategic Analysis

...million pieces per day worldwide, or a total of 4.01 billion packages. Total revenue in 2011 was $53.1 billion (UPS, 2011). UPS serves the global market for logistics services, which include transportation, distribution, forwarding, ground, ocean and air freight, brokerage and financing. Their technology seamlessly binds their service portfolio. They have three reportable segments: U.S. Domestic Package, International Package and Supply Chain & Freight. An in-depth SWOT analysis was performed in order to develop new strategies for the company. External Analysis: Customer Analysis According to the UPS website (Datamonitor, 2011), the company does well in providing a diversified set of services through its three business segments of the end markets: UPS’ US domestic package business segment; UPS’ international package business segment; and the supply chain and freight business segment. UPS’ US domestic package business segment is engaged in air and ground delivery of small packages up to 150 pounds in weight and letters to and from all 50 states in the US (Datamonitor, 2012). It also provides time-definite delivery of certain heavy-weight packages. The company delivers to more businesses and zip codes in the US, and worldwide from the US, than its competitors. Similarly, UPS’ international package business segment provides air and ground delivery of small packages and letters to more than 220 countries...

Words: 6529 - Pages: 27

Premium Essay


...Acronyms .................................................................................................................................. iv I. INTRODUCTION ................................................................................................................ 1 II. CHALLENGE OF EXPORT DIVERSIFICATION ....................................................... 1 III. EXPORT PERFORMANCE AND PROGRESS OR LACK IN DIVERSIFICATION .................................................................................................... 3 Exploiting Non-traditional Markets for Exports ............................................................................... 14 IV. INTERNATIONAL EXPERIENCE AND LESSONS LEARNT ............................... 18 V. CONSTRAINTS TO EXPORT DIVERSIFICATION IN BANGLADESH ............... 21 Key Constraints to Export Expansion and Diversification ............................................................... 21 VI. TRADE POLICY AND EXPORT DIVERSIFICATION............................................ 30 Protection Policy and Export Diversification ................................................................................... 34 VII....

Words: 28195 - Pages: 113

Premium Essay

International Business

...INTERNATIONAL BUSINESS OPERATIONS Need for International Business International Business is important and necessary because economic isolationism is today impossible. Failure to become part of the global market assures a country of declining economic influence and deteriorating standard of living for its citizens. Successful participation in international business promises improved quality of life and a better society leading to a more peaceful world. Most people are likely, on individual levels, to become involved with international business corporations during their careers. Manufacturing companies, and also service companies like banks, consulting firms or insurance are going global. In an era of open borders, niche marketing, instant communications and free ways of reaching millions of people, huge opportunity emerges for individuals to enter the international business arena. International business offers companies new markets. Since the mid-20th century, the growth of international trade and investment has been substantially larger than the growth of domestic economies. The combination of domestic and international business presents more opportunities for expansion, growth and income than domestic business alone. International business generates the flow of ideas, services and capital across the world. International business also offers consumers new options. It enables the acquisition of a wider variety of products, in terms of both quality and quantity and at......

Words: 13773 - Pages: 56