Business Environment

Tariff and Non-Tariff Barriers

Presented By:Zalak SukhadiaTanvee Thakkar

Jeevan KumarRahul Soni

Sumit Rana

Tariff Barriers Tariff barriers are duties imposed on goods

which effectively create an obstacle to trade, although this is not necessarily the purpose of putting tariffs in place. These barriers are also sometimes known as import restraints, because they limit the amount of goods which can be imported into a country.

Non-Tariff Barriers Non-tariff barriers to trade (NTBs) are trade

barriers that restrict imports, but are unlike the usual form of a tariff; And Tariff Barriers restricts Exports.

Some common examples of NTB's are anti-dumping measures and countervailing duties, which, although called non-tariff barriers. Example of Tariff Barrier is Export Duty.

Types of NTB’s1) Specific Limitations on Trade• Quotas• Import Licensing requirements• Proportion restrictions of foreign to domestic

goods (local content requirements)• Embargoes (specific type of quotas)

2) Customs and Administrative Entry Procedures:

• Antidumping practices• Tariff classifications• Documentation requirements• Fees

(3) Standards:1. Standard disparities2. Intergovernmental acceptances

of testing methods and standards3. Packaging, labeling, and marking

(4) Government Participation in Trade:

1. Government procurement policies

2. Export subsidies3. Countervailing duties4. Domestic assistance programs

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

6) Others:• Voluntary export restraints

Commodity Agreements

The international trade in some commodities is influenced by International Commodity Agreement which are inter-governmental arrangements concerning the production of, and trade in, certain primary products with a view to stabilising their prices.

The main objective of commodity agreements is to stablise prices.

Forms of Commodity Agreements

Quota Agreements – International quota agreements seek to prevent a fall in commodity prices by regulating their supply.

Buffer Stock Agreements – International buffer stock agreements seek to stablise commodity prices by maintaining the demand-supply balance.

Bilateral / Multilateral Contracts – Bilateral contract to purchase and sell certain quantities of a commodity at agreed prices may be entered into between a major importer and exporter of the commodity. In such an agreement, an upper price and a lower price are specified.

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