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Non Tarrif Barriers

In: Business and Management

Submitted By klmcm
Words 1129
Pages 5
Tariff and non-tariff barriers are two important barriers of international trade. These are one of the traditional forms of government interventions in the economic activity. Even today it is practiced by all the countries around the globe. The governments all over the world try to improve their economy by supporting domestic business, through the tariff and non-tariff barriers. Even though it supports domestic business over the foreign competition, it comes at the cost of the domestic consumer. The consumer is forced to pay heavy import duties for getting the quality products. Tariff and non tariff barriers are explained in the following paragraphs by stating how they are used in the global scenario and their importance in risk management of a country. Tariff barriers are the most common device used for regulating the imports. It is commonly called as import duty. A tariff is a tax levied on products by the country of importation. Tariffs are generally considered as the least restrictive international trade barrier and are classified in to two important categories namely Advalorem tariff and Specific or Flat tariff. The Advalorem tariff is the one which charges a particular percentage of the total value of the imported products. This type of tariffs is used for the products like crude oil which are not countable. The specific or flat tariff charges an amount based on the total number of units imported in to the country/region. These tariffs are used for the countable products like television sets, laptops, mobiles and refrigerators. Non-tariff barriers include all the impediments to international trade other than tariffs. They are broadly classified in to two major categories namely direct non-tariff barriers and the indirect non-tariff barriers. Direct non-tariff barriers are those which specifically limit the imports of goods or services such as embargoes

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