Trade barriers .pptx

Presentation on trade barriers.

1. DEVI AHILYA VISHWAVIDYALAYA (INDORE) SCHOOL OF COMMERCE TOPIC- TRADE BARRIERS ( TARIFF AND NON-TARIFF BARRIERS) SUBMITTED TO: MS. SURBHI JODHA SUBMITTED BY: AKASH DHANDORE M.COM(AFC) IV AFC/21/1002

2. What are Trade Barriers ? Trade barriers are the restrictions imposed by the government on the movement of goods between countries (Imports & Exports). Most trade barriers work on the same principle: the imposition of some sort of cost on trade that raises the prices or availability of the traded products. If two or more countries use trade barriers against each other, then a trade war results.

3. Tariff Barriers Tariff is a tax or a duty on the products that move across borders. The most important of tariff barriers is the customs duty imposed by the importing country. Sometimes tax might also be imposed on exporting products. The most important tariff barriers are :-

4. 1.On the basis of origin 1.Export Duty:- An export duty is a tax levied by the country of origin, on a commodity designed for use in other countries. The majority of finished goods do not attract export duty. Such duties are normally imposed on the primary products in order to conserve them for domestic industries. In India, export duty is levied on oilseeds, coffee and onions. 2.Import Duty:- An import duty is a tax imposed on a commodity originating in another country by the country for which the product designated. The purpose of heavy import duties to earn revenue to make imports costly and to provide protection to domestic industries. Countries imports and thereby remove the deficit in the balance e of payment.

5. 2. On the basis of qualification 1. Specific Duty:- “Tariff levied on the basis of Units”. Specific duty is based on the physical characteristics of goods. When a fixed sum of money, keeping in view the weight or measurement of a commodity is levied as tariff, it is known as specific duty. For example, a fixed sum of import duty may be levied on the import of every barrel of oil, irrespective of quality and value. 2. Ad-valorem Duty:- It is a tariff levied on the basis of the value of the item. This duty is imposed “according to value”. 3. Compound Duty:- It is a tariff imposed on the basis of both the vale and quantity..

6. Non-Tariff Barriers Government also use other tools besides tariffs to restrict trade. One types non-tariff barrier is the import quota, or limits on the quantity of a certain good that can be imported. The goal of setting quotas is to limit imports to the specific amount of a given product. 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.

7. Types of non- tariff barrier Quota system. Licenses. Import deposit. Product standards. Product Labeling. Packaging Requirements . Foreign Exchange Regulations.

8. BASIS FOR COMPARISON TARIFF BARRIERS NON-TARIFF BARRIERS Meaning Tariff Barriers implies the taxes or duties imposed by the government on its imports, so as to provide protection to its domestic companies and increase government revenue. Non-tariff barriers cover all the restrictions other than taxes imposed by the government on its imports, so as to provide protection to the domestic companies and discriminate new entrants. Permissibility World Trade Organization allowed the imposition of tariff barriers to its member nation but at a reasonable rate only. World Trade Organization abolished the imposition of import quotas and voluntary export restraints. Nature Explicit Implicit Tariff Barriers Vs Non-Tariff Barriers

9. Form Taxes and Duties Regulations , Conditions, Requirements, Formalities, etc. Revenue Government receives revenue No revenue is received by the government Affects It affects the price of imported goods. It affects the quantity or price or both of the imported goods. Monopolistic Organizations As the government charges import duty, monopolistic groups can be controlled. The monopolistic organization charges high prices through low output. Profit High profits made by the importers can be controlled. Importers can make more profits.

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