Question

1. Why do domestic manufacturers obtain antidumping duty through the government?

2. How do nontariff barriers restrict international trade?

Answer 1

1. Sometime Exporters sell their products in foriegn country at a price which is quite lower than the price in domestic country in order to get variuos goals like increase in market share, beat competition etc. This process of lower pricing of exports is called dumping. This impacts the domestic market in bad way as public will now be prefering cheaper imported goods instead of domestic goods. So Government intervene to safeguard the domestic market by imposing anti dumping duty. sometime its might be above 100%.

2. Goverment use various non tariff barrier to restrict internation trade . like quota, license,embargo , standards. In Licence, only list of licensed merchandise will get into import and export thus restric internation trade on variuos types of products. In Quota, restriction is imposed in physical terms. Both License and quota makes the companies dependend on government for international trade. they can't trade all the products of their choice and in their desired quantity and time. Standard also restrict the trade as imposing specific requirement of lebelling, classification and testing.