Trade Barriers

Trade barriers refer to restrictions on trade between nations. The most common types of trade barriers are subsidies, tariffs, quotas, duties, and embargoes. While free trade is about the theoretical removal of all trade barriers, allowing for completely free and unfettered trade. In practice, however, no nation fully embraces free trade, as all nations utilize some assortment of trade barriers for their own benefit.

Trade Barriers in Asia

A. Central Asia
The countries that are part of Central Asia are: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan , Uzbekistan, Mongolia, Afghanistan, Northern and western Pakistan, Northeastern Iran, Jammu and Kashmi, Southern Siberia. These countries are experiencing deficits and problems regarding trading with other countries because of the presence of trade barriers. One of the trade barriers in Central Asia is that changes in tariff schedules are rather frequent and unpredictable. In addition to this, escalation of tariffs is also prevalent in Azerbaijan, Kazakhstan, and Uzbekistan which discourages other countries to do trade with these countries.

B. East Asia C. South Asia

The importance of tariffs as barriers to trade has gradually declined in South Asia. However, high tariffs still exist for certain sensitive products, and there is a strong presence of nontariff barriers (NTBs) including high border transaction costs in the region. In particular, high transportation costs act as a serious constraint to enhancing merchandise trade flow in the region. A number of studies have shown that the economies with close geographical location could potentially benefit substantially from higher trade, provided trade and transport barriers are removed through a regional transit arrangement.

One of the critical factors preventing South Asia from achieving its full potential in terms of international trade is the absence of regional transit trade. South Asian countries do not have a regional transit arrangement, unlike European unions. Though some landlocked countries such as Afghanistan, Bhutan and Nepal have a partial transit.

In order to lessen regional and international trade transportation costs, South

Asian countries have been trying to connect the region through improved regional transit agreement. But this is not easy due to numerous challenges that these countries are already facing.

As mentioned, Afghanistan, Bhutan and Nepal are landlocked countries and depend solely on transit through neighboring countries. They are confronted with a number of constraints that increase the logistics costs of their international trade. Landlocked developing countries, as a group, are among the poorest of developing countries, with limited capacities and dependence on a very limited number of commodities for their export earnings.

Lack of territorial access to sea- ports, remoteness and isolation from world markets have contributed to their poverty, substantially inflating transportation costs and lowering their effective participation in international. For example, Bhutan and Nepal rely heavily on Indias eastern coast for their international trade. Due to several blockages, including those visible at border-crossing corridors and transit ports, Bhutan and Nepal face substantial trade costs, which otherwise could be avoided if a regional transit trade regime is restored in South Asia. Most, if not all, landlocked countries in South Asia are exporters of commodity. The very high transport costs that they must bear constraints export development since that burden limits the range of potential exports and markets in which goods can be traded. Due to this, the price of imports tends to increase because of high transit transportation costs. In addition, poor institutions (for example, lack of e-filing of trade documents), inadequate infrastructure (for example, lack of a modern warehouse or container handling facility at border), and the absence of a regional transit trade (virtually in the entire region) are prohibiting the growth of trade in South Asia.

D.