...ECFI 644 International Economics Instructor: Dosse Toulaboe By Zhenjie Song (Leo) The Impact of Tariff and Non-Tariff Barriers International Trade Introduction In nowadays, tariff and non-tariff barriers have affected the trends and structure of international trade, the geographic direction, and importing and exporting countries relations (Stigler, 1971). This research paper mainly will talk about the tariff, non-tariff, and the relationship and impact of them. Tariff A tariff is simply a tax or duty placed on an imported good by a domestic government. Tariffs are usually levied as a percentage of the declared value of the good, similar to a sales tax. Unlike a sales tax, tariff rates are often different for every good and tariffs do not apply to domestically produced goods. Tariff could be an old and popular method of obtaining revenue from international business and economic activities. Generally, government levy tariffs for three main reasons. The first is that the tariff can protect fledgling domestic industries from foreign competition; the second is that the tariff can protect aging and inefficient domestic industries from foreign competition; the last reason is that the tariff can protect domestic producers from dumping by foreign companies or governments. Dumping occurs when a foreign company charges a price in the domestic market which is "too low". In most instances "too low" is generally understood to be a price which is lower in a foreign market than the price...
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...Barriers to International Trade- Non-Tariff Barriers and Infrastructure on freight transportation Intro 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...
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...Non-tariff barriers to trade (NTBs) are trade barriers that restrict imports but are not in the usual form of a tariff. Some common examples of NTB's are anti-dumping measures and countervailing duties, which, although called non-tariff barriers, have the effect of tariffs once they are enacted. Some of non-tariff barriers are not directly related to foreign economic regulations but nevertheless have a significant impact on foreign-economic activity and foreign trade between countries. Different types of Non-tariff barriers: There are several different variants of division of non-tariff barriers. These are – 1. Licenses The most common instruments of direct regulation of imports (and sometimes export) are licenses and quotas. License system requires that a state (through specially authorized office) issues permits for foreign trade transactions of import and export commodities included in the lists of licensed merchandises. Product licensing can take many forms and procedures. The main types of licenses are general license that permits unrestricted importation or exportation of goods included in the lists for a certain period of time; and one-time license for a certain product importer (exporter) to import (or export). 2. Quotas Licensing of foreign trade is closely related to quantitative restrictions – quotas - on imports and exports of certain goods. A quota is a limitation in value or in physical terms, imposed on import and export of certain goods for a certain...
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...RESPONSES TO ANTI-DUMPING & ALLIED DUTIES AS TARIFF BARRIERS FOR INTERNATIONAL TRADE UNDER THE GUIDANCE OF PROFESSOR RITU SRIVASTAVA IN THE PARTIAL FULLFILLMENT OF POST GRADUATION DIPLOMA IN MANAGEMENT NIILM-CMS (2010-2012) INDEX SNO. TOPIC PAGE NO. 1. INTRODUCTION 3-6 2. RELEVANCE OF THE STUDY 7 3. RESEARCH OBJECTIVE 8 4. RESEARCH TOOLS AND METHODS 9-10 5. DATA ANALYSIS AND FINDINGS 11-15 6. CONCLUSION 16 7. RECOMMENDATIONS 17 8. RESEARCH LIMITATIONS 18 9. FUTURE AREA OF WORK 19 10. BIBLIOGRAPHY 20 11. ANNEXURE 21 INTRODUCTION: Our project is all about Anti – Dumping, other allied duties and the way these duties affect our Exporters. It also covers the protection policies like “Drawbacks” which our Exporters receive from the Indian Government. Before going into details about our project we would like to define some common terms which are related to our project like “Dumping and Anti – Dumping” etc. Dumping: The term Dumping is said to occur when the goods are exported from a country to another country at a price which is lower than its cost of production. It is therefore an unfair practice which can have a distortive effect on International trade. Dumping occurs when the export price of goods imported into India...
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...Explain the international business environment in which a selected organization operates Define international trade International trade refers to the purchasing of goods and services across the international terrains. Furthermore in many countries, this trade subsidizes substantially to the Gross Domestic Product while for the companies involved it contributes a lot to their total revenue and profits. The economic, political, and social importance of this trade is increasing every day. What do you consider to be the importance of international trade to business/individuals/economies? Numerous factors contribute positively to international businesses/trade these consist of industrialization and globalization. International trade is an important part to globalization, and without it, countries will produce limited goods and services that may limit their economies to expand for the greater good, this is because their market will be limited within the borders it will be hard to export goods which may be vital to their countries for example medicine ,coffee and so on. International trade is related to domestic trade only that it has more associated costs and legislation. The costs include tariffs and transportation costs while the legislation barriers they face is being discriminated in order to protect domestic industries. It is costly to hire and use factors of production across borders; thus international trade rarely trades factors of production but trades in goods and...
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...International trade ECO/372 International trade International trade is essential to a country for importing and exporting their goods and services around the world. The United States is one of the largest countries involved in international trade and finance. A country’s surplus or a deficit affects the supply and demand of the good or service. International trade effects gross domestic product of a country and therefore the entire economic outlook of the nation and this could cause a ripple effect on other nations as well. Trade barriers such as restrictions, tariffs, and quotas can greatly affect the trade between two nations and should be carefully considered. The Unites States has had a tumultuous trade relationship with China and various barriers have been considered and put in place from both countries.Foreign exchange rates also affect countries based upon the value of currency exchange and how much money purchases how much of a good or service. Import Surplus Impact One of the biggest competitors when it comes to the international trade is Japan. The Dell and Toshiba corporations are well known for the competition between the two countries. International trade has increased since the World Trade Organization (WTO) came into existence. The WTO has pushed countries more for competition and to increase their gross domestic product. International trade allows countries to do more business and have access to a larger variety of goods and services. Comparative...
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...Journal of Economic Surveys, 2006, 11: 24-25. Green Barriers Trade and its Influences on China's Foreign Trade Thomas J. Sargent ABSTRACT In recent years, green consumption has become a main trend of the consumption in many developed countries and these countries began to make strict standards to restrict the entry of foreign products below their standards of environmental protection. Key words：Green Barriers; products; Trade In recent years, green consumption has become a main trend of the consumption in many developed countries and these countries began to make strict standards to restrict the entry of foreign products below their standards of environmental protection. These regulations have many unfavorable influences on the export of developing countries and are generally known as "Green Barriers to trade". In accordance with the provisions of the Agreement on Green Barriers to Trade of WTO, "Green Barriers to Trade" is defined as the compulsory and arbitrary Green regulations, standards and conformity assessment procedures of the importing countries in the name of the protection of human health and environment that actually form barriers to trade with an aim to protect its home market and domestic products. 1. Analysis on the causes of formation of "Green Trade Barriers" Firstly, the worsening of ecology is the major reason for "Green Barriers". With the development of industry and technology, the economy increases...
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...Chapter 2 THE DYNAMIC ENVIRONMENT OF INTERNATIONAL TRADE Copyright © 2012 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing 2e by Cateora 1 Chapter learning objectives 1. The basis for the reestablishment of world trade following World War II 2. The importance of balance-of-payment figures to a country’s economy 3. The effects of protectionism on world trade 4. The seven types of trade barriers 5. The importance of the GATT and the WTO 6. The emergence of the International Monetary Fund and the World Bank Group Copyright © 2012 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing 2e by Cateora 2 Australia to play catalyst to break down trade barriers • Barriers to trade, both tariff and nontariff, are one of the major issues confronting international marketers • If the benefits of the social, political, and economic changes now taking place are to be fully realised, free trade must prevail throughout the global marketplace ▪ WTO (World Trade Organization) • Countries are pushing for speedier removal of quotas on textiles and clothing while the WTO examines cuts in agricultural support Copyright © 2012 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing 2e by Cateora 3 Top ten 2009 Australian trading partners Copyright © 2012 McGraw-Hill Australia Pty Ltd PPTs t/a International Marketing 2e by Cateora 4 The twentieth century • First half of the twentieth century ...
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...Impact of WTO on Globalization Trade Policy Introduction World Trade Organization (WTO), found in 1995 and headquarters is in Geneva, has its clearly main purposes since its beginning that to promote economic and trade development all over the world. Up to the end of 2008, there are more than 135 members in the organization. In particularly, with the expansion of globalization trade, international business is more often than any time in the history. As one of the most crucial carrier of economic globalization, WTO establishes a set of international trade rules focusing on the liberalization, which play a strong role of encouraging and guiding in the process of economic globalization (Pauwelyn, 2005). This essay will mainly discuss WTO’s influence on the rules of globalization trade in combination with the current reform of trade policy. It will explain the topic from the following four aspects in detail: first, the basic rules WTO set up for the international trade, then, rules on e-commerce, the new rising global business, third, the preferential rules made by WTO for developing countries, and at last, it will discuss the impacts of WTO’s regulations on environmental issues when doing global trade. Basic Rules WTO set up for the Global Trade WTO's main objective is to provide adequate competitive opportunities for the trade among the members, which needs recognized common rules and principles for members to abide. There are two basic principles, namely the MFN principle (referred...
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...countries is setting up general agreements on tariffs and trade allowing free trade among nations and lowering barriers, some of these trade agreements include Normal Trade Relations, and the World Trade Organization. Some reasons for this growth and interdependence and for the rise in global integration is the need for growth in providing international goods and services, there has also been a growth in international finical flows, investments and new currencies that have made international trade not only easier but necessary for economic growth. 2) The General Agreements on Tariffs and Trade was created to regulate trade between countries. The organization is responsible for removing barriers between countries in order to increase the flow of international trade and to encourage countries to trade beyond their own boarders. 3) The World Trade Organization is different from the General Tariffs and Trade in that the World Trade Organization is responsible for overseeing international trade, they also regulate trade and the services related to trade. The World Trade Organization also settles disputes among nations and ensures that all transactions are completed legally. The General Agreements on Tariffs and Trade differs from the World Trade organization in that GATT provided a forum for multilateral discussion among countries to reduce trade barriers, the nations included in GATT would meet periodically to discuss barriers and would mutually agree on them. 4) In the past decade...
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...International business comprises all commercial transactions (private and governmental, sales, investments, logistics, and transportation) that take place between two or more regions, countries and nations beyond their political boundaries. Usually, private companies undertake such transactions for profit; governments undertake them for profit and for political reasons.[1] It refers to all those business activities which involve cross border transactions of goods, services, resources between two or more nations. Transaction of economic resources include capital, skills, people etc. for international production of physical goods and services such as finance, banking, insurance, construction etc 1. The exchange of goods and services among individuals and businesses in multiple countries. 2. A specific entity, such as a multinational corporation or international business company that engages in business among multiple countries. Export policies Bangladesh’s exports are dominated by ready made garments, most of which are exported to the US and the EU. Nearly all garment exports are from firms operating in export processing zones or as bonded warehouses. In both cases they can import their textile and other inputs free of Customs duties and all other import taxes (including the 3% advance income tax) with the use of “back-to-back LCs” i.e. letters of credit based on LCs issued for their exports. As noted previously, machinery used by exporters is also exempt from all import taxes...
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...Education Green Barriers and China’s Agricultural Product Export: Is There Any Relationship? Mudiarasan Kuppusamy1 & Behrooz Gharleghi1,2 1 Faculty of Business and Management, Asia Pacific University of Technology and Innovation, Kuala Lumpur, Malaysia 2 Centre for the Study of the Economics of Ageing (CSEA), Asia Pacific University of Technology and Innovation, Kuala Lumpur, Malaysia Correspondence: Behrooz Gharleghi, Faculty of Business and Management, Asia Pacific University of Technology and Innovation, TPM, 57000, Bukit Jail, Kuala Lumpur, Malaysia. Tel: 60-19-615-3515. E-mail: behrooz@apu.edu.my Received: April 4, 2014 Accepted: May 30, 2014 doi:10.5539/ass.v10n16p34 Online Published: July 24, 2014 URL: http://dx.doi.org/10.5539/ass.v10n16p34 Abstract As an agricultural country, the export of China's agricultural products are often suffered the restrictions from the green barriers. The positive green barriers can regulate the agricultural production in China, and promote the agricultural development and international trade; on the other hand, the negative green barriers would increase the cost of trade, trade friction, and prevent the development of international trade. So the research of influence of green barriers on China’s agricultural products is very realistic. According to the influence of green barriers on China’s agricultural exports, the corresponding countermeasures can be made to deal with the green barriers and improvement...
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...Trade policy A ‘‘‘commercial policy’’’ (also referred to as a trade policy or international trade policy) is a set of rules and regulations that are intended to change international trade flows, particularly to restrict imports. Every nation has some form of ‘‘‘trade policy’’’ in place, with public officials formulating the policy which they think would be most appropriate for their country. Their aim is to boost the nation’s international trade. Example ‘‘‘European Union’’’, Mercosur committee etc. The purpose of trade policy is to help a nation's international trade run more smoothly, by setting clear standards and goals which can be understood by potential trading partners. In many regions, groups of nations work together to create mutually beneficial trade policies. Trade policy can involve various complex types of actions, such as the elimination of quantitative restrictions or the reduction of tariffs. According to a geographic dimension, there is unilateral, bilateral, regional, and multilateral liberalization. According to the depth of a bilateral or regional reform, there may be free trade areas (wherein partners eliminate trade barriers with respect to each other), ‘‘‘custom unions’’’ (whereby partners eliminate reciprocal barriers and agree on a common level of barriers against no partners), and free economic areas (or deep integration as in, for example, the European Union, where not only trade but also the movement of factors has been liberalized, where a common...
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...Trade Name Institution Barriers to trade are government-induced restrictions on trade. There are several different types of trade barrier. They include tariffs and non-tariff barriers. A tariff is the amount of import duty charged on a particular type of goods. Non-tariff trade barriers are measures intended to favor local industry (Maskus, 2001). They can include trade regulations, labeling rules, and unfair government subsidies The World Trade Organization (WTO) deals with the global rules of trade amongst nations and its main purpose is ensuring that trade flows as smoothly, predictably and freely as possible. A major rule of the multilateral trade system states that reductions in trade barriers are applied, on a most-favored-nation basis, to all World Trade Organization members (Hoekman, 2009). This means that no WTO member is discriminated against by a fellow member's trade regime. Regional trade agreements (RTAs) are however an exception to this rule. Under RTAs reductions in trade barriers apply only to the parties to the agreement. There are two major types of regional trade agreements under the World Trade Organization; customs unions and free trade areas. Some countries may decide to sign interim agreements operating during a transition period, ultimately leading to the creation of a customs union or a free-trade area. Regional trade agreements must be consistent with the World Trade Organization rules that govern such agreements, which require...
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...benefits of rising abundance” (JF Kennedy March 14, 1961). The trade barriers have been for a long time a constraint for the economic growth for the small countries that try to export their product abroad. The efficiency of the dismantling of trade barriers requires to first identifying the link between the term “trade” and its consequences on the countries’ economies I trade and his barriers International trade is the exchange of goods and services between countries. This type of trade gives rise to an economic world, which the prices, or demand and supply, affect and are affected by global events. A good example of that is during the 1973 oil crisis. The members of the OAPEC (organisation of Arab petroleum exporting countries) have decided an oil embargo "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. The economic effect was immediate. The price of oil quadrupled by 1974 to US$12 per barrel (75 US$/m3). The most important effect was on the economy. Because of this embargo some countries couldn’t export or import their product in foreign country. This embargo put some countries in a big trouble concerning the oil supply. Despite this free aspect of the trade, there are some countries that tried to protect their local economy against foreigner investment. So potential investor could not expand, facing the discrimination of the other countries' protectionism. Trade barrier works as a tool to ensure a protectionism policy. They are...
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