Question

Discuss types of trade restrictions and the arguments for and against imposing them.

In today’s globalized world, few topics draw more media attention than the use of trade restrictions. Import restrictions, tariffs, and currency manipulation are just some of the complex and difficult issues involved in this topic. Explain the various types of trade restrictions used historically and in modern times and discuss the arguments for and against their use in the international commercial markets of today.

Answer 1

TYPES OF TRADE RESTRICTIONS.

In spite of the benefits of the international trade ,many nations put limits on the trade for various reasons.The main types of trade restrictions are ,tarrifs,quotas,licencing, subsidies etc.

A tarrif is a tax put on goods imported from abroad.The effect of tarrif is to raise the price of the imported products.It helps domestic producers of similar products to sell them at higher prices.There are two types of tarrifs.Protective tarrifs,and Reveue tarrifs.

A quota is a limit on the amount of  goods that can be imported.Putting a quota on a good creates its shortage, which causes the price of the goods to raise, and allow domestic producers to raise the price.

An embargo stops export or imports of a product or groups of product or from another country.

Some countries require import or export licenses.when domestic importers of foreign goods are required to get licenses.Imports can be restricted by not issuing many licenses.Export licences have been used to restrict trade with certain countries.

Standards are rules or regulations that a nation use to restrict imports.

Subsidies can be thought of as tarrifs in reverse. Instead of taxing the foreign imports, the government give grants of money to domestic producers to encourage exports.