InternationTrade Presentation Final_1.pptx

Internarional Trade Presentation by Group-2 of Master of Development Studies at Yangon University of Economics

1. YANGON UNIVERSITY OF ECONOMICS DEPARTMENT OF ECONOMICS MASTER OF DEVELOPMENT STUDIES 18 TH BATCH INTERNATIONAL TRADE Presentation Non-tariff Trade Barriers in China Presented by Group 2 Page 1 of 23

2. GROUP MEMBERS Ma Ei Theint Theint Aung Mg Nay Zar Tun Mg Nyan Linn Htoo Mg Zwe Pyae Kyaw © Mg Nyan Lynn Saw Mg Thaw Zin Tun Ma Thet Myat Yadanar Aye Mg Ye Ko Ko Aung Ma Zin Zin Oo 46 54 57 55 33 44 31 13 32 Page 2 of 23

3. Content Presenters Introduction China Import Quotas Mg Ye Ko Ko Aung Other Non-Tariff Barriers Restrictions Mg Nay Zar Tun Mg Nyan Linn Htoo Significant implications for global trade Effects of NTBs on Country Trade Mg Nyan Lynn Saw Conclusion (Challenges, Opportunities and Future Prospects) Mg Zwe Pyae Kyaw References and Sources All Members Q & A Session Ma Zin Zin Oo Mg Thaw Zin Tun Ma Thet Myat Yadanar Aye Ma Ei Theint Theint Aung Page 3 of 23

4. Mg Ye Ko Ko Aung Introduction Evolution of Non- Tariff Trade Barriers Postwar negotiations reduced tariffs, elevating the significance of non-tariff trade barriers Overview Of Trade Barriers TWO types of barriers to trade: Tariff and Non-tariff barriers. Tariff Barriers (TBs) usually take the form of taxes limiting imports from or exports to another country. Non-Tariff Barriers to trade (NTBs), or sometimes referred to as Non-Tariff Measures (NTMs), including import quotas, licenses, embargo, standards and regulations, voluntary export restraints, and antidumping actions, are set up to restrict trade in more indirect ways other than trying to discourage trade directly through high taxes or fees. Page 4 of 23

5. Mg Ye Ko Ko Aung China Import Quotas China import quotas, as the most important non-tariff barrier, are one of the various ways countries try to protect their own domestic market from the adverse effects of an influx of exports of other countries. However, specific China import quotas apply to more than 40 categories of goods, including watches, cars, some textile products and also certain kind of foods. However, there are quotas imposed by other countries against Chinese products. For example, the USA currently restricts the amount of textiles that can be imported Page 5 of 23

6. Mg Ye Ko Ko Aung China Import Quotas CHINA has raised its rare-earth metal production quota for 2023 by 14% over last year to 240,000 tonnes, as the country moves to support its booming electric vehicle (EV) industry. CHINA produced 7 million new energy vehicles in 2022, the most in the world. It aims to further increase domestic sales and exports, heightening the need for a stable supply of rare earths. The quota for medium and heavy rare earths, considered essential for high-tech products and weapons, was kept unchanged at just under 20,000 tonnes. As tensions with the U.S. mount, dominance over the production of such elements could provide Beijing significant bargaining power. Currently a Chinese imposed quota is applied to the mining of rare earth minerals. China accounted for 70% of the world's rare earth production in 2022, according to U.S. Geological Survey estimates Page 6 of 23

7. Mg Ye Ko Ko Aung Absolute Quotas and Tariff-Rate Quotas An absolute quota is when there is a numerical restriction imposed over a certain period of time. If that quota is met before the end of the period, the quota is considered filled and no further goods are allowed to enter into the country. There are China import quotas with this absolute restriction. A tariff-rate quota is slightly different. During the quota period, merchandise is allowed to be entered at a reduced rate of duty. There is no limit to the volume of goods. However, all further merchandise will be subject to a higher rate of duty after this period. There are also China import quotas with this relative restriction. China Import Quotas Page 7 of 23

8. Mg Ye Ko Ko Aung Effects of Imposing Quotas Through restricting foreign competition and hence the simple economic principle of supply and demand, imported goods artificially rise in price and stimulate the demand for higher priced domestic goods. While domestic producers are favourable to import quotas, as they benefit from the increased demand and protection of their profits, there is a negative effect on the domestic consumers. When such restrictions are imposed, there can be various side effects resulting from it. Smuggling and corruption are common as firms offer incentives to officials to allow their goods to be approved. Motivations to Imposing Quotas The motivation to impose quotas may be hard to understand, especially when free trade is considered to be a beneficial process. The underlying motivation is usually just to reduce imports into a country in an effort to increase the domestic production of a specific good or service. Non-Tariff Barriers to trade often have a political motivation as recently seen between the EU/US and China. China Import Quotas Page 8 of 23

9. Mg Nay Zar Tun Other Non-Tariff Barriers Restrictions Licenses are also a commonly used non-tariff barrier of entry. In China , since 2005 > import licensing controls is limited. In 2015, only 2 categories of products were still subject to licenses. 1.Licenses Page 9 of 23

10. Mg Nay Zar Tun Other Non-Tariff Barriers Restrictions Embargoes are restrictions or prohibitions imposed by one country on another, often for political, economic, or security reasons. Historical Embargoes The United States maintained embargoes against China . An embargo was reimposed by the U.S. following the 1989 Tiananmen Square protests and massacre. These embargoes were responses to significant events and political developments 2.Embargoes in China Page 10 of 23

11. Mg Nay Zar Tun Other Non-Tariff Barriers Restrictions Sanctions and Human Rights Concerns The U.S. has gradually increased sanctions against Chinese businesses and organizations. The U.S. Department of Commerce has added 721 Chinese entities to an entity list Sanctions have been imposed in response to human rights abuses in Xinjiang (Uyghur region), Hong Kong, and Tibet. Arms Embargo and Military Support After the Tiananmen Square massacre in 1989, the U.S. imposed an arms embargo against China. 2.Embargoes in China Page 11 of 23

12. Mg Nay Zar Tun Other Non-Tariff Barriers Restrictions Recent Developments In 2021, the Chinese government passed the Anti-Foreign Sanctions Law The U.S. Senate voted to ban virtually all imports Canada’s Sanctions Canada has enacted sanctions under the Special Economic Measures Act. 2.Embargoes in China Page 12 of 23

13. Mg Nay Zar Tun Other Non-Tariff Barriers Restrictions Countries requiring >standards to be met by imports Labelling requirements, classification requirements and necessity of certain tests These standards can act as a barrier to block products produced in foreign countries China has a complex system Foreign companies often face challenges 3.Technical Standards and Regulations Page 13 of 23

14. Mg Nyan Linn Htoo Other Non-Tariff Barriers Restrictions Anti-dumping duties are tariffs imposed by a government on imported goods that are priced below their fair market value or below the cost of production. Many countries impose anti-dumping duties against China with examples being exporting stainless steel into India or the EU. It is a tool allowed by the WTO as a safeguard against cheap imports that are a danger to the local industry. The Indian and the European administration have imposed these anti-dumping duties to restrict exports from China damaging their own manufacturing industries. 4. Anti-Dumping Duties Page 14 of 23

15. Mg Nyan Linn Htoo Other Non-Tariff Barriers Restrictions Intervening with the Yuan exchange rate against the dollar is a barrier to international trade with China, especially for Western Countries. China is the self-imposed exchange rate control for trade, as a result, there can be discrepancy in the prices paid depending on the currency exchange rate. Foreign direct investment (FDI) for Chinese companies are slowly being lifted, therefore there is an increase in the level of FDI. On the other hand, foreign investment restrictions are provided for foreign companies, therefore it is hard to measure how much involvement these companies can have in certain sectors. 5.Exchange Rate Controls and Investment Regulations Page 15 of 23

16. Mg Nyan Linn Htoo Other Non-Tariff Barriers Restrictions VERs refer to the case where an importing country induces another nation to reduce its exports of a commodity voluntarily. It aims to prevent from suffering under cheap imports, especially for protecting domestic industries, mitigating trade imbalances, and addressing unfair trade practices. Other importing country from foreign can induce VERs on Chinese companies. VERs are also favourable alternative for Chinese companies to achieve market share of the certain products in foreign markets because Chinese exporters tend to fill their quota with higher-quality and higher-priced units of the product over time. 6. Voluntary Export Restraints (VERs) Page 16 of 23

17. Global Value Chains Example: Apple iPhone Production Trade Policy Example : Belt and Road Initiative (BRI) Trade Friction Example : US-China Trade War Export and Import Dynamics Example : China's Rare Earths Export Restrictions Impact on Exports Example : China's Steel Exports Consumer Welfare Example : Affordable Consumer Electronics Mg Nyan Lynn Saw Significant implications for global trade Page 17 of 23

18. Trade Restrictions Example: In 2020, China imposed stricter customs inspections on Australian barley imports, citing concerns over biosecurity risks. This move was widely seen as a trade retaliation measure amidst political tensions, causing significant disruptions to Australian barley exports to China. Trade Imbalances Example: China's dominance in certain industries, like steel, can create trade imbalances. While China exports large quantities of steel at potentially lower prices due to government subsidies, domestic steel industries in other countries struggle to compete, impacting their export volumes.(2019 report by the WTO) Mg Nyan Lynn Saw Effects of NTBs on Country Trade Page 18 of 23

19. Industrial Adjustment Example: The imposition of anti-dumping duties by the US on solar panels from China led to a decline in Chinese solar panel exports to the US market. This forced Chinese manufacturers to adjust their production processes and target other markets, impacting the global solar panel industry. Costs and Compliance Example: Complex regulatory procedures and lengthy customs clearance processes associated with NTMs can increase administrative burdens and compliance costs for businesses engaged in international trade. This can discourage smaller companies from entering the export market. Mg Nyan Lynn Saw Effects of NTBs on Country Trade Page 19 of 23

20. Challenges Mg Zwe Pyae Kyaw Conclusion Regulatory Complexity Market Access Barriers Dispute Resolution Intellectual Property Concerns Opportunities Quality Improvement Market Diversification Policy Response Innovation and Technological Upgrading & Page 20 of 23

21. Future Prospects Mg Zwe Pyae Kyaw Conclusion Continued Integration into Global Value Chains Shift towards High-Tech and Knowledge-Based Industries Greater Emphasis on Domestic Market Growth Trade Diversification and Regional Integration Digitalization and E-commerce Expansion International Regulatory Cooperation and Standards Hormonization Sustainable Development and Green Trade Page 21 of 23

22. Group 2 References and Sources https://intrepidsourcing.com/trade-wiki/trade-barriers-overview-about-international-business-obstacles/ https://intrepidsourcing.com/trade-wiki/quotas-restrictions-non-tariff-barriers-to-trade-in-china/ https://intrepidsourcing.com/trade-wiki/protectionism-forms-purpose-outlook/ Li, M., M. Yu, and Z. Yu (2022), ‘An Anatomy of China’s Non-tariff Measures’, in Ing, L.Y.,D.P. Rial and R. Anandhika (eds.), Non-tariff Measures: Australia, China, India, Japan, New Zealand and Republic of Korea. Jakarta: ERIA Ghodsi , Mahdi (2018) : The impact of Chinese technical barriers to trade on its manufacturing imports, FIW Working Paper, No. 186, FIW - Research Centre International Economics, Vienna Non-Tariff Barriers in the U.S.-China Trade War Tuo Chen, Chang-Tai Hsieh, and Zheng Michael Song NBER Working Paper, NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue, Cambridge, MA 02138, August 2022. http://www.nber.org/papers/w30318 Page 22 of 23

23. Presented by Group 2 Q & A Session THANK YOU Very Much For Your Time & Kind Attention Page 23 of 23