Question

Find TWO other examples of NTB's (Nontariff Barriers) AND the politics of these policies (Why do this)

Answer 1

Non-tariff barriers are trade barriers that restrict the import & export of goods through means other than tariffs. The World Trade Organization (WTO) identifies various non-tariff barriers to trade, including import licensing, pre-shipment inspections, rules of origin, custom delayers, and other mechanisms that prevent or restrict trade.

Non-Tariff Barriers (NTBs) refer to restrictions that result from prohibitions, conditions, or specific market requirements that make importation or exportation of products difficult and/or costly. NTBs also include unjustified and/or improper application of Non-Tariff Measures (NTMs) such as sanitary and phytosanitary (SPS) measures and other technical barriers to Trade (TBT).

NTBs arise from different measures taken by governments and authorities in the form of government laws, regulations, policies, conditions, restrictions or specific requirements, and private sector business practices, or prohibitions that protect the domestic industries from foreign competition.

  Developed countries use non-tariff barriers as an economic strategy to control the level of trade they conduct with other countries. When making decisions on the non-tariff barriers to implement in international trade, countries base the barriers on the availability of goods and services for import and export, as well as the existing political alliances with other trade partners.

Developed countries may elect to release other countries from being subjected to additional taxes on imported or exported goods, and instead create other non-tariff barriers with a different monetary effect.

Origin of non trafficking barriers:-

During the formation of nation-states, countries had to devise ways of raising money to finance local projects and pay recurrent expenditures. One of these ways was the introduction of tariffs, which placed restrictions on imported and exported goods and services.

  However, industrialized countries transitioned from tariff barriers to non-tariff barriers since they had built other sources of funding. Most developing nations still rely on tariff barriers as a way of raising revenues to finance national projects while regulating international trade with other countries.

Afterward, the industrialized countries switched from tariff to non-tariff barriers for several reasons. One reason is to regulate international trade, even in the absence of tariff barriers. It exempts certain countries from paying additional taxes on goods, and instead, create other meaningful non-traffic barriers.

The second reason for introducing non-tariff barriers is to support weak industries that have been affected by the reduction or withdrawal of tariff barriers. The final reason is that non-tariff barriers are an avenue for interest groups to influence trade regulation in the absence of trade tariffs.

Types of Non-Tariff Barriers:-

1. Protectionist barriers:-

Protectionist barriers are designed to protect certain sectors of domestic industries at the expense of other countries. The restrictions make it difficult for other countries to compete favorably with locally produced goods and services. The barriers may take the form of licensing requirements, allocation of quotas, antidumping duties, import deposits, etc.

2. Assistive policies:-

Although assistive policies are designed to protect domestic companies and enterprises, they do not directly restrict trade with other countries, but they implement actions that can restrict free trade with other countries. Examples of assistive barriers include custom procedures, packaging and labeling requirements, technical standards and norms, sanitary standards, etc.

3. Non-protectionist policies:-

Non-protectionist policies are not designed to directly restrict the import or export of goods and services, but the overall outcomes lead to free trade restrictions. The policies are primarily designed to protect the health and safety of people and animals while maintaining the integrity of the environment.

Examples of Non-Tariff Barriers::-

1. Licenses

Licenses are one of the most common instruments that most countries use to regulate the importation of goods. The license system allows authorized companies to import specific commodities that are included in the list of licensed goods.

2. Quotas

Quotas are quantitative restrictions that are imposed on imports and exports of a specific product for a specified period. Countries use quotas as directive forms of administrative regulation of foreign trade, and it narrows down the range of countries where firms can trade certain commodities. It caps the number of goods that can be imported or exported at any given time.

To study contributes to a better understanding of the implications of NTMs for developing countries
in two regards. First, it provides an analysis of the utilization, methods of quantification and impacts of NTMs.
These issues are discussed in sections I, II and III. Secondly, the study also illustrates some aspects of NTMs and
the policy responses Governments and the international community might deploy to address some of the issues
related to NTMs. These issues are presented in sections IV, V and VI.

Section I presents an overview on the use and impact of NTMs. It illustrates the various categories of
NTMs and how these are classified and then discusses their use, incidence and how they relate to traditional
trade policies. It also presents some evidence of the impact of NTMs on international trade. In section I, several
important points are made: first, as NTMs vary greatly in type, intent and scope, it illustrates how proper
classification is of critical importance in order to better identify and distinguish the various forms of NTMs. The
second point is that the use of NTMs is quite widespread and their overall use is increasing: countries appear to
utilize an increasingly large array of NTMs to regulate their imports. Section I also highlights the fact that NTMs
disproportionally affect agricultural products and some of the manufacturing sectors that are often of export
interest to developing countries (e.g. textiles and apparel). A final argument discussed in section I relates to the
correlation and importance of NTMs relative to tariffs. The analysis shows that NTMs are often utilized to reinforce
the market restrictions imposed by tariffs. The analysis also provides evidence that NTMs are generally much
more important than tariffs in restricting market access, especially with regard to low-income countries.
Section II presents a more technical discussion of the issues related to the analysis and quantification
of the effects of NTMs. The quantification of the effects is first conceptualized in a simple supply-demand
framework and then some specific empirical methodologies are discussed. Section II shows how NTMs affect
the volume and patterns of international trade by quantitative means and/or by influencing the relative prices and
costs of production. The quantitative methodologies discussed include inventory measures, price comparison,
econometric estimation of quantity impacts and gravity equations, general equilibrium models and cost-benefit
analysis. The discussion summarizes the advantages and disadvantages of the various quantitative tools and
illustrates their appropriate use.
Section III provides a detailed review of the empirical literature on NTMs. This section is particularly
useful for understanding how the quantitative methods analysed in section II are empirically implemented to
analyse the effects of NTMs on international trade and economic welfare. The discussion in section III is not
only methodological but provides an empirical assessment of the impact of different types of NTMs. The section
focuses on a number of case studies, providing policy recommendations and quantitative analysis with regard to
several sectors, countries and types of NTMs. It is organized by type of NTM and reviews a number of studies
related to technical measures, import bans, pre-shipment inspections, rules of origin, export restrictions, State
trading enterprises, anti-dumping and tariff rate quotas. The general message of section III is that NTMs can
have quite diverse effects, depending not only on their type and scope but also on the economic framework in
which they are applied. The literature reviewed in this section also emphasizes that the effects of NTMs are largely
dependent not only on NTMs per se but also on implementation procedures and administration mechanisms.