Political Economy Of International Trade Questions Long
There are several main types of trade barriers that countries may impose to restrict international trade. These barriers can be categorized into two broad categories: tariff barriers and non-tariff barriers.
1. Tariff Barriers:
Tariffs are taxes or duties imposed on imported goods, making them more expensive and less competitive in the domestic market. Tariffs can be specific (a fixed amount per unit) or ad valorem (a percentage of the product's value). The main types of tariff barriers include:
- Import tariffs: These are levied on imported goods at the border, increasing their price and making them less attractive to consumers.
- Export tariffs: These are imposed on goods leaving the country, discouraging exports and protecting domestic industries.
- Transit tariffs: These are charged on goods passing through a country, often used to generate revenue or protect domestic industries.
- Tariff rate quotas: These involve a combination of a low tariff rate for a certain quantity of imports and a higher tariff rate for any additional imports beyond that quantity.
2. Non-Tariff Barriers:
Non-tariff barriers refer to various measures that restrict trade without involving the imposition of tariffs. These barriers can take different forms, including:
- Import quotas: These limit the quantity of a specific product that can be imported into a country, protecting domestic industries from foreign competition.
- Embargoes: These are complete bans on the import or export of certain goods or services, often imposed for political or security reasons.
- Subsidies: These are financial assistance provided by governments to domestic industries, giving them a competitive advantage over foreign competitors.
- Technical barriers to trade: These include regulations, standards, and certification requirements that products must meet to be imported, which can create obstacles for foreign producers.
- Voluntary export restraints: These are agreements between countries where the exporting country voluntarily limits its exports to protect the importing country's domestic industries.
- Currency manipulation: This involves artificially devaluing or manipulating a country's currency to make its exports cheaper and imports more expensive.
- Intellectual property rights protection: This refers to laws and regulations that protect patents, copyrights, and trademarks, preventing unauthorized use or imitation of intellectual property.
It is important to note that trade barriers can have both positive and negative effects. While they may protect domestic industries and jobs, they can also lead to higher prices for consumers, reduced product variety, and retaliation from trading partners. The political economy of international trade involves analyzing the motivations behind the imposition of trade barriers and their impact on domestic and global economies.