UNIT 29: TRADE BARRIERS

Task 1: Answer the following questions

1. What are trade barriers? Its advantage and disadvantage?

Trade barriers are any of a number of government-placed restrictions on trade between

nations. The advantage of trade barriers is that they can be beneficial to the aggregate
domestic economy. Domestic firms benefit with higher sales, greater profit, and more income
to resource owners. However, its advantage is that domestic consumers may face with higher
price and restricted access to imports.

2. What are 5 common reasons / Justifications for trade barriers?

5 common justifications for trade barriers are:

 Protecting domestic employment;

 Protecting relatively young industies;
 Preventing unfair activities trade of foreign firms;
 Preventing “dumping”
 Protecting firms and industries that produce output vital to the security and defense of
the nation.

3. What are 4 common forms of trade barriers?

4 common forms of trade barriers are tariff, quota, subsidy, and embargo.

 Tariffs are simply taxes placed on imports. A tariff is added the price of the imported
goods.
 A quota is simply a quantity restriction placed on a good, service or activity.
 Subsidies are intended simply to make certain key goods affordable to citizens and
made imports non-competitive.
 An embargo prohibits the import or export of anything with other countries and it is a
form of punishment

Task 2: Make up a full sentence using suggested words

1. Trade barriers /any /number /government-placed /restrictions /trade /between nations

Trade barriers are any of a number of government-placed restrictions on trade between

nations.

2.term/free/trade/refers/theoretical/removal/all/trade/barries/allow/for/completely/
free/unfettered/trade

1
The term free trade refers to the theoretical removal of all trade barries, allowing for
completely free and unfettered trade.

3. practice/however/no nation/ fully/embraces/free/trade/all/nations/utilize/some/

assortment/trade barriers/their/own/benefit

In practice, however, no nation fully embraces free trade, all nations utilize some assortmnet
of trade barriers for theier own benefit.

4. One/most/common/justification/trade/barriers/protect/domestic/employment

One of the most common justifications for trade barriers is to protect domestic employment.

5. This/practice/”dumping”/may/undertaken/drive/domestic/procedures/out/business/

lessen/competition/increase/market/share/foreign/producers.

This practice “dumping” might be undertaken to drive domestic producers out of the
business, lessen compettion, and increase the market share of foreign producers.

6. A/last/note/argument/that/trade barriers/often/need/protect/firms/industries/that

/produce/output/vital/security/defense/nation

A last noted argument is that trade barriers are often needed to protect firms and industries
that produce output vital to the security and defense of the nation.

7. Tariffs/simply/taxes/place/import/They/work/like/any/other taxes/A
tariff/add/price/import/goods

Tariffs are simply taxes placed on imports. They work like any other taxes. A tariff is added
the price of imported goods.

8. second/trade barriers/design/restrict/imports/promote/exports/quotas/imports

The second trade barriers designed to restric imports and promote exports is quotas on
imports.

9. subsidies/another/common/trade barriers/often/place/protect/domestic/industries

Subsidies are another of the common trade barriers, and often placed to protect domestic
industries.

10. A number/free trade bodies exist/world /try/curtail /use/trade barriers/nations

A number of free trade bodies exist in the world to try to curtail the use of trade barriers by
the nations.