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Economics

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Non Tariff Barriers - Examples

Level:
A Level, IB
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Non-Tariff Barriers (NTBs) may include any policy measures other than tariffs that can impact trade flows. As average import tariffs in the world economy have fallen, so NTBs have become more common!

Non-tariff barriers

  • Intellectual property laws e.g. patents and copyright protection
  • Technical barriers to trade including labeling rules and stringent sanitary standards. These increase product compliance costs
  • Preferential state procurement policies – where government favour local producers when finalizing contracts for state spending
  • Domestic subsidies – aid for domestic businesses facing financial problems e.g. subsidies for car manufacturers or loss-making airlines.
  • Financial protectionism – e.g. when a government instructs banks to give priority when making loans to domestic businesses
  • Murky or hidden protectionism - e.g. state measures that indirectly discriminate against foreign workers, investors and traders.
  • Managed exchange rates – government intervention in currency markets to affect relative prices of imports and exports

Some recent examples of non-tariff barriers:

  • Until recently China ruled that all avocados coming from countries such as Kenya had to be frozen to -30°C and peeled before shipping!
  • Trucks of fruit coming from North Macedonia to Serbia are subject to customs and sanitary checks, and long wait times at the border. Fresh fruit deteriorates the longer trucks have to wait at the border!
  • Within the African Continental Free Trade Area, businesses have to contend with 55 separate national standards, 55 test certificates and 55 national inspection procedures. This slows the speed at which trade takes place.

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