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Barriers to international trade P270-278 - Coggle Diagram
Barriers to international trade P270-278
Tariffs
Export tariff:!:
Tax on goods that as they are leaving the country
Import tariff:!:
Tax on goods that are entering the country
Ad valorem tariff
assessed as a % of the market value of imported gods
Specific tariff
Assessed as a specific dollar amount per unit of wealth or other standard measure ie: £2 per kg
A compound tariff
Mix of as valorem & specific tariff
Some goods have a mix of items that are tariffed differently
Non tariff barriers (NTB)
Any policy , regulation, procedure other than tariffs that has an effect on impeding international trade may be labelled NTB
Quota:!:
A numerical limit on the amount of a good that may be imported into a country during some time period
Traditionally protects; agriculture, automobiles, textiles
Tariff rate quota:!:
Imposes a low tariff rate on a limited amount of imports of a good
Above the threshold of imports, tariff rates increases massively
Helps domestic firms as their domestic production will increase at high tariff price
Surrounding industry benefits as consumers search for alternatives
Losers will be the companies who use the good in producing their good
Numerical export controls - voluntary export restraint (VER):!:
A promise that a country will make which entails limiting exports to another country to a specified amount/% of the affected market
Used to promote a country's industrial policy/promote competitiveness of its other industries
Product & testing standards:!:
A good must meet a certain country's product and testing standard before sale in that country
Restricted access to distribution networks :!:
A restricted access to a country's normal channels of distribution
IE indonesia restrict foreign screen time to 60% in its movie theatres
Public sector procurement policies:!:
Policies that give preferential treatment to domestic firms
Foreign firms get locked out from much of the market
IE American recovery and reinvestment act of 2009
Requires that any iron, steel, and manufactured goods purchased using funds provided by the act to build or repair a public building or a public work must be produced in the US
Local purchase requirements :!:
Requires foreign firms to purchase from the domestic market
IE indonesia requires pharmaceutical companies to manufacture locally if they wish the MNC's drugs to be approved
Regulatory controls:!:
These are:
Conducting H&S assessments
Enforcing environmental reguations
Requiring firms to obtain licenses before beginning operations / construction of a new plant
Currency controls:!:
Exports are allowed to exchange at favourable rates - makes foreign markets more attractive for domestic firms
Importers are forced to buy unfavourable exchange rates
Investment control:!:
Restriction of foreign firms owning too much market share in key market industries
IE Philippines restricts foreign ownership in advertising by 30%