Trade Barriers

Trade Barriers

Trade barriers refer to the government policies and measures  which obstruct the free flow of goods and services across national borders. Trade barriers are imposed on exports  and imports. Trade barriers are man made obstacles on the free movement of goods in between different countries of the world. Trade barriers are artificial restrictions imposed on trading activities in between different countries. Such barriers are usually imposed by the importing countries but they adversely affect the volume of world exports and imports. Trade barriers include tariff barriers (fiscal controls) and non-tariff barriers (quantitative restrictions).

Objectives of Trade Barriers

  • To protect domestic industries or certain other sector of the economy from foreign competition.
  • To guard or protect the economy against dumping by rich countries with surplus production.
  • To promote indigenous research and development and to promote new industries.
  • To conserve the foreign exchange resources of the country.
  • To make the balance of payments position more favorable.
  • To counteract trade barriers imposed by other countries.
  • To encourage the use of domestic production in the domestic market and thereby to make the country strong and self-sufficient.
  • To mobilize revenue for the government.
  • To discriminate against certain countries.
  • To make the economy self-reliant and stop unnecessary consumptions.

Forms and Types of Trade Barriers

Trade barriers may be divided into two groups, namely tariff and non-tariff barriers.

1. Tariff Barriers

  • Export Duties
  • Import Duties
  • Transit Duties
  • Specific Duties
  • Revenue Tariff
  • Compound Duties
  • Protective Tariff
  • Single Column Tariff
  • Double Column Tariff
  • Triple Column Tariff

2. Non-Tariff Barriers

  • Quota System
  • Import Licensing
  • Consular Formalities
  • Customs Regulations
  • State Trading
  • Foreign Exchange Regulation
  • Health and Safety Regulations
  • Miscellaneous

These are all about Trade Barriers, its objectives and types of trade barriers.