Question

Choose two nontariff trade barriers that you think the United States utilizes and describe who benefits and who loses as a result. Be sure to consider the major stakeholder groups including producers, consumers, and government. In general, why have nontariff trade barriers been so difficult for the World Trade Organization (WTO) to eliminate?

Answer 1

The two major non trade tariff utilized by United States are -Quota and Embargoes. 1. A quota is the most important non tariff trade barriers . It is the direct restriction by a government to restrict import of certain amount of a good
Import quotas are used to protect a domestic industry to protect domestic agriculture and to maintain trade balance 2. Embargoes is an official ban by government on import of certain goods from another nations.An embargo is an U.S federal government order that restricts commerce with a specified country or the exchange of specified goods Before non tariff trade barriers, In U.S price of commodity was OP. At OP price level, U.S. producers produced OQ amount of commodity X and U.S consumers consumed OQ3 amount of commodity X. The total import of commodity X was QQ3. But after the imposition of quota and embargo, producer surplus would increased and consumer surplus would reduced. At price OP1, Production increased by OQ1 amount from OQ amount of commodity X. But the consumption is reduced by OQ2 amount from OQ3. The total import is reduced to OQ2 As a result of non tariff trade barriers Producer benefits and consumer got loss , US government revenue would be increased by the rectangle MNab It is difficult for WTO to eliminate non tariff trade barriers among nation. Because non tariff trade barriers are used by nation to protect the development of new industries in domestic economy foreign rivals. It can reduce the unemployment rate in domestic nation by providing opportunities in industries and different sectors. It help a nation to boost local counties which help the country economic independence