PRESTIGE INSTITUTE OF MANAGEMENT AND RESEARCH

INTERNATIONAL ECONOMICS

NON-TARIFF BARRIERS
PRESENTED TO: PRESENTED BY:
Dr. Rupal Chowdhary Aakansha Malviya
Aalok Ghosh
Akhil Pillai
Krisha Kothari
 INTRODUCTION: TRADE BARRIERS

• Trade barriers refers to the government policies and measures which obstruct the free
flow of goods and services across national borders.
• This are used to protect and encourage existing domestic industry.
• It basically are tariffs that increase trade, weaken trade, restrict trade.
• Trade barriers includes macro economic measures affecting trade.
• Some common examples are anti-dumping measures and countervailing duties also
called non-tariff barriers.
 REASONS FOR NON-TARIFF BARRIERS

• Protect Domestic Employment.

• Protect Domestic Consumers, Security, And The Environment.
• Protect The New Industry.
• Protects From Unfair Competition. 
 NON TARIFF MEASURE CLASSIFICATION

TECHNICAL MEASURES
• Sanitary And Phytosanitary Measures.
• Technical Barriers To Trade.
• Pre-shipment Inspection And Other Formalities.
 NON TARIFF MEASURE CLASSIFICATION

NON TECHNICAL MEASURES

• Contingent Trade-protective Measures.
• Non-automatic Licensing, Quotas, Prohibitions And Quantity-control Measures
Other Than For SPS Or TBT Reasons.
• Price-control Measures, Including Additional Taxes And Charges .
• Finance Measures .
 NON TARIFF MEASURE CLASSIFICATION

• Measures Affecting Competition

• Trade-related Investment Measures
• Distribution Restrictions K Restrictions On Post-sales Services
• Subsidies (Excluding Export Subsidies Under P7)
• Government Procurement Restrictions
• Intellectual Property
• Rules Of Origin
• Export related measures.
TYPES OF NON-TARIFF BARRIERS

Standardizatio Local Content

License
n Requirements

Export
Import Quotas Embargo
License

Export Exchange Rate Voluntary

Subsidies Devaluation Export Curbs

Administrative
Barrier
 PROS AND CONS OF NON-TARIFF BARRIERS

 the domestic market creates more jobs. The decline in imports should divert demand for domestic
products. Domestic firms should increase production to make up for the shortfall due to fewer imports.
To increase production, they have to invest in capital goods and recruit more local workers. As a result,
they create a multiplier effect on the economy.
 non-tariff barriers protect new or strategic industrial developments. That provides sufficient room for
them to grow, achieve economies of scale, and be competitive in the international market. Finally, they
create more jobs and income for the domestic economy.
 non-tariff policies are more effective in limiting import volumes. Under quotas, for example, the main
target is the quantity of imports. When the government tries to reduce imports, quotas are more
effective than tariffs because they directly impact import volumes.
non-tariff barriers also have negative impacts
• the government cannot generate extra income. Under the tariff, the government imposes a tax on
imported goods. On the other hand, it does not apply to non-tariff barriers.
• non-tariff barriers limit the functioning of the free market. Free market advocates view this as
causing the inefficient allocation of resources in global markets. Countries should specialize and
trade products that have a comparative advantage. That way, free trade results in maximum benefits.
However, because the government intervened through non-tariff barriers, such benefits diminished.
• the cost of running a business increases. The company has to fulfill several administrative
requirements, such as product standardization and complicated customs procedures.
• exporters must face unfair competition in partner countries. Non-tariff barriers are beneficial for
domestic companies but put foreign companies at a disadvantage. Exporters must sell fewer goods
under the quota policy. When exposed to quota restrictions, they have to find other markets to sell
their products. If not, they have to cut production, lowering their income and profits. Also,
devaluation policies by destination countries make exporters’ products more expensive. They are
less competitive in the destination market.
 CONCLUSION

• Although tariffs have significantly reduced over last some years in global trade, bigger
concern is the dismantling of non tariff barriers that restrict trade from less developed
countries.
• The agriculture sector has its high share of discriminatory trade practices to protect
procedures.
• Tariffs distort trade flows.
 REFERENCES

• https://unctad.org/system/files/official-document/ditctab20122_en.pdf
• https://corporatefinanceinstitute.com/resources/knowledge/economics/non-tariff-barri
ers/
• https://penpoin.com/non-tariff-barriers/