Non-Tariff Barriers

Abhishek Toppo

Non-Tariff Barriers
Non-tariff barriers to trade (NTBs) are trade barriers that restrict imports but are not in the usual form of a tariff.

Non-Tariff Barriers
Example of non-tariff barrier Assume India does not impose any tariff barrier on Chinese plastic goods, but makes it mandatory that any imported plastic should be of such and such quality, which say the Chinese plastic does not meet, and consequently such plastic goods cannot be sold in India. Such barrier by govt of India would come under non-tariff barriers. Like case of India banning mobile phones without IMEI code, when suddenly all Chinese mobile phones from market disappeared

Types of NTBs
1.Specific Limitations on Trade: Quotas
Sets a physical limit on the quantity of a good that can be imported into a country in a given period of time Example: Russia has quotas on the number of tons of beef (315,000) and chicken (1.05 million) that can be imported each year. If the quotas are reached, the state then charges an additional 60-80% tax.

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Import Licensing requirements Each license specifies the volume of imports allowed, and the total volume allowed should not exceed the quota. Licenses can be sold to importing companies at a competitive price, or simply a fee.

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Proportion restrictions of foreign to domestic goods (local content requirements) Its mandates that a product produced and sold in a country must have a specified minimum amount of domestic production value, in the form of wages paid to local workers or materials and components produced within the country Eg-local content requirements for automobiles, used by Malaysia and other countries, force local auto manufacturers to use more domestically produced automobiles components and parts ( e.g. sheet metals or seat covers)

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Embargoes An embargo is the partial or complete prohibition of commerce and trade with a particular country, in order to isolate it. Cuba (by US), arms, consumer goods, money, enacted 1960

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2.Customs and Administrative Entry Procedures:
Valuation systems Antidumping practices Intended to discourage importation and sale of foreign-made goods at prices substantially below domestic prices for the same items. Eg- Chinese products on which anti-dumping duty has been imposed include sectors such as chemicals and petrochemicals, pharma, steel, fibres and consumer goods.

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Tariff classifications
A classification assigned by government officials that affects the size of a tariff and the imposition of import quotas. Example: The U.S. Customs Service only charges an 8.5% tariff on imported leather or non rubber shoes, while it charges anywhere from 20-67% for imported rubber shoes like athletic footwear or waterproof shoes

Documentation requirements Fees

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3) Standards
Standard disparities Intergovernmental acceptances of testing methods and standards Packaging, labelling, and marking.

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4)Government Participation in Trade: Government procurement policies Export subsidies Countervailing duties A duty placed on imported goods that are being subsidized by the importing government Domestic assistance programs

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5.Charges on imports: Prior import deposit subsidies Administrative fees Special supplementary duties Import credit discriminations Variable levies Border taxes

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6.Others: Voluntary export restraints Orderly marketing agreements