Question

Identify and explain at-least four trade restrictions.

Answer 1

The trade barriers are imposed by the government by placing rules and regulations, tariffs, import quotas and embargos. The four different types of trade barriers are Tariffs, Non-Tariffs, Import Quotas and Voluntary Export Restraints.

1. TARIFFS: A tariff is a tax on imports or exports between sovereign states. It is a form of regulation of foreign trade and a policy that taxes foreign products to encourage or safeguard domestic industry. The tariff is historically used to protect infant industries and to allow import substitution industrialization.

2. NON TARIFFS : Non-tariff barriers to trade (NTBs) or sometimes called "Non-Tariff Measures (NTMs)" are trade barriers that restrict imports or exports of goods or services through mechanisms other than the simple imposition of tariffs. A non tariff barrier is a way to restrict trade using trade barriers in a form other than a tariff. Non tariff barriers include quotas, embargoes, sanctions, and levies. Difference between Tariff and Non Tariff barriers . Tariff barriers means a tax on imported goods to restrict imports in the country. A tariff barriers is a price based policy to restrict trade because it changes the price of import paid by the importer. The non-tariff barriers are numerous.

3. IMPORT QUOTAS: An import quota is a type of trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time. Quotas, like other trade restrictions, are typically used to benefit the producers of a good in that economy. How it works (Example): Quotas are usually set by government or by an organization of producers of a particular product. ... For example, the Organization of Petroleum Exporting Countries sets a production quota for crude oil in order to "maintain" the price of crude oil in world markets.

4. EMBARGO : The definition of an embargo is a government ban on moving commercial ships in and out of certain ports, or a restriction of trade for a specific product or with a specific country. An example of an embargo is the trade ban in place that prevents the US from trading with Cuba. Embargo, legal prohibition by a government or group of governments restricting the departure of vessels or movement of goods from some or all locations to one or more countries. The UN-imposed economic embargo on Iraq remained in force during the Persian Gulf War but expired after.