International trade

International trade is the exchange of capital, goods, and services across international

borders or territories. In most countries, such trade represents a significant share of gross

domestic product (GDP). While international trade has been present throughout much of

history (see Silk Road, Amber Road), its economic, social, and political importance has been

on the rise in recent centuries.

Industrialization, advanced transportation, globalization, multinational corporations, and

outsourcing are all having a major impact on the international trade system. Increasing

international trade is crucial to the continuance of globalization. Without international trade,

nations would be limited to the goods and services produced within their own borders.

International trade is, in principle, not different from domestic trade as the motivation and the

behavior of parties involved in a trade do not change fundamentally regardless of whether

trade is across a border or not. The main difference is that international trade is typically more

costly than domestic trade. The reason is that a border typically imposes additional costs such

as tariffs, time costs due to border delays and costs associated with country differences such

as language, the legal system or culture.

Another difference between domestic and international trade is that factors of production such

as capital and labour are typically more mobile within a country than across countries. Thus

international trade is mostly restricted to trade in goods and services, and only to a lesser

extent to trade in capital, labor or other factors of production. Trade in goods and services can

serve as a substitute for trade in factors of production.

Instead of importing a factor of production, a country can import goods that make intensive

use of that factor of production and thus embody it. An example is the import of labor-

intensive goods by the United States from China. Instead of importing Chinese labor, the

United States imports goods that were produced with Chinese labor. One report in 2010

suggested that international trade was increased when a country hosted a network of

immigrants, but the trade effect was weakened when the immigrants became assimilated into

their new country.

International trade is also a branch of economics, which, together with international finance,

forms the larger branch of international economics. For more, see The Observatory of

Economic Complexity.

[1]

This type of trade gives rise to a world economy, in which prices, or supply and demand,

affect and are affected by global events. Political change in Asia, for example, could result in

an increase in the cost of labor, thereby increasing the manufacturing costs for an American

sneaker company based in Malaysia, which would then result in an increase in the price that

you have to pay to buy the tennis shoes at your local mall. A decrease in the cost of labor, on

the other hand, would result in you having to pay less for your new shoes. 

This type of trade gives rise to a world economy, in which prices, or supply and demand,

affect and are affected by global events. Political change in Asia, for example, could result in

an increase in the cost of labor, thereby increasing the manufacturing costs for an American

sneaker company based in Malaysia, which would then result in an increase in the price that

you have to pay to buy the tennis shoes at your local mall. A decrease in the cost of labor, on

the other hand, would result in you having to pay less for your new shoes.

Trading globally gives consumers and countries the opportunity to be exposed to goods and

services not available in their own countries. Almost every kind of product can be found on

the international market: food, clothes, spare parts, oil, jewelry, wine, stocks, currencies and

water. Services are also traded: tourism, banking, consulting and transportation. A product

that is sold to the global market is an export, and a product that is bought from the global

market is an import. Imports and exports are accounted for in acountry's current account in

the balance of payments. 

Increased Efficiency of Trading Globally

Global trade allows wealthy countries to use their resources - whether labor, technology

or capital - more efficiently. Because countries are endowed with different assets and natural

resources (land, labor, capital and technology), some countries may produce the same good

more efficiently and therefore sell it more cheaply than other countries. If a country cannot

efficiently produce an item, it can obtain the item by trading with another country that can.

This is known as specialization in international trade.

[2]

Trade barriers

Trade barriers are government-induced restrictions on international trade

Trade barriers are measures that governments or public authorities introduce to make

imported goods or services less competitive than locally produced goods and services. Not

everything that prevents or restricts trade can be characterised as a trade barrier.

A trade barrier may be linked to the very product or service that is traded, for example

technical requirements. A barrier can also be of an administrative nature, for example rules

and procedures in connection with the transaction. In a number of areas, special international

ground rules have been agreed, which limit the ways in which countries can regulate trade. It

means that some barriers are legal while others are illegal.

Most trade barriers work on the same principle: the imposition of some sort of cost on trade

that raises the price of the traded products. If two or more nations repeatedly use trade

barriers against each other, then a trade war results.

Economists generally agree that trade barriers are detrimental and decrease overall economic

efficiency, this can be explained by the theory of comparative advantage. In theory, free trade

involves the removal of all such barriers, except perhaps those considered necessary for

health or national security. In practice, however, even those countries promoting free trade

heavily subsidize certain industries, such as agriculture and steel.

Trade barriers are often criticized for the effect they have on the developing world. Because

rich-country players call most of the shots and set trade policies, goods such as crops that

developing countries are best at producing still face high barriers. Trade barriers such as taxes

on food imports or subsidies for farmers in developed economies lead to overproduction and

dumping on world markets, thus lowering prices and hurting poor-country farmers. Tariffs

also tend to be anti-poor, with low rates for raw commodities and high rates for labor-

intensive processed goods. The Commitment to Development Index measures the effect that

rich country trade policies actually have on the developing world.

Another negative aspect of trade barriers is that it would cause a limited choice of products

and would therefore force customers to pay higher prices and accept inferior quality.

[3]

Some forms of Trade barriers:

Customs duties

Customs procedures

Technical regulations, standards, etc. - for example for the purpose of consumer

protection, health protection, protection of the environment, etc

Veterinary and phytosanitary measures - barriers based on health and safety

regulations

Restrictions on access to primary products - for example in the form of export

levies that drive up prices artificially or special export prices that are higher than

the price of the same primary products for use in national processing industries

Insufficient protection of intellectual property rights - both with respect to the

scope of protection and with respect to the possibilities of legal protection. This

includes, for instance, protection of patents, copyrights, trademarks and

geographical indications of origin

Barriers to trade in services - for example in the form of discriminatory

conditions

Restrictions on access to investment - for example through national participation

requirements or restrictions on access to repatriation of profits

Unfair application of state aid and other forms of subsidies

Trade barriers can be broadly classified in two types:

1. Tariff Barriers

2. Non Tariff Barriers

[4]

Tariff Barriers

Tariffs, which are taxes on imports of commodities into a country or region, are among the

oldest forms of government intervention in economic activity. They are implemented for two

clear economic purposes. First, they provide revenue for the government. Second, they

improve economic returns to firms and suppliers of resources to domestic industry that face

competition from foreign imports. Tariffs are widely used to protect domestic producers’

incomes from foreign competition. This protection comes at an economic cost to domestic

consumers who pay higher prices for import competing goods, and to the economy as a whole

through the inefficient allocation of resources to the import competing domestic industry.

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. Tariff barriers are also

sometimes known as import restraints, because they limit the amount of goods which can be

imported into a country. Many organizations which promote trade are concerned about both

tariff and non-tariff barriers to free trade, and a number of nations have agreed to radically

reduce their trade barriers to promote the exchange of goods across their borders.

A number of different types of duties can be levied when goods cross international

boundaries. With an ad valorem duty, for example, the importer must pay a fee which is

calculated as a percentage of the value of the goods being imported. Specific tariffs are set

amounts which are levied on products which are imported, regardless of values, while

environmental tariffs penalize nations with poor environmental records.

For importers, tariff barriers can make it difficult to bring goods into a country. The importer

may be forced to import less because the tariff barriers cannot be afforded otherwise, and it

may need to charge more for the goods to make importing worthwhile. Tariffs are designed to

force importers to do this to level the field between domestic producers and importers,

allowing costly domestic producers to compete with importers who may be able to bring in

goods at lower cost.

Protectionism, in which nations promote the interests of domestic producers by restricting

importers, is common in many nations, but it is also frowned upon, primarily by nations

which want to be able to export goods for trade in other countries. Organizations such as the

World Trade Organization have promoted the lifting of tariff barriers to reduce the burden on

[5]

importers. Non-tariff barriers such as import quotas are also targeted for elimination by

organizations which promote free trade.

Some tariff barriers are likely to always remain in place, even in nations which are very open

to free trade. Changing the structure of tariffs, taxes, and related expenses is a continual

project, and nations occasionally push back or lash out by radically altering their tariffs and

other barriers to trade. Nations may also use trade barriers to make political statements which

are designed to pressure other countries into modifying their behavior. For example, Country

A might refuse to import beef from Country B until Country B can demonstrate that its meat

supply is free of bovine spongiform encephalitis (BSE), also known as mad cow disease.

Types of tariff barriers

There are different types of tarrif barriers on different basis:

On the basis of Purpose: Revenue Tariff and Protective Tariff

On the Basis of Origin and Destination: Ad Valorem Duty , Specific Duty and Compound

Duty

On the Basis of Country-wise Discrimination: Single Column Tariff , Double Column

Tariff and Triple Column Tariff

[6]

On the basis of Purpose

Revenue Tariff

A tax applied to imported and exported goods in order to increase the revenue of a region or

national government. An example of a revenue tariff in a business is the tax applied to all

imported oil in the United States.

Protective Tariff

A type of customs duty that serves as a barrier against penetration of the domestic market by

certain foreign goods and against passage of these goods through the country. Protective

tariffs also serve to impede the export of domestic raw materials and semi-finished products.

They are intended to create optimal conditions for domestic industry.

In the formative period of capitalism, protective tariffs were used to protect developing

national industry from foreign competition. In the late 19th century, for example, the United

States instituted protective tariffs to limit the entry of British goods into the domestic market.

Protective tariffs are now used primarily to maintain high domestic price levels and to ensure

maximum profit for the monopolies. A modified form of protective tariff has been established

by international state-monopoly alliances, such as the European Economic Community

(Common Market), in the struggle to dominate the world capitalist market and capture

spheres of economic and political influence. This tariff policy has a negative effect on

European trade and hurts the developing countries of Africa and Asia.

Modern forms of protective tariffs are high anti-dumping and compensatory duties. They are

employed by importing countries as a supplement to conventional customs duties in cases

where the exporter sells goods on foreign markets at prices lower than those in effect on the

domestic market. The size of the antidumping duty is the difference between the price of the

article in its country of origin and the export price. The United States introduced this type of

duty in the 1920’s and 1930’s.

Prohibitive tariffs are a variety of protective tariff with very high rates, which can amount to

30 percent and more of the price of the article and sometimes can even exceed the price of the

article. They appeared in the second half of the 19th century as a reaction to the abolition of a

ban on the export and import of certain articles and the introduction of the policy of free

[7]

trade. Prohibitive tariffs are common in many developed capitalist countries. For example,

during the 1960’s about one-sixth of all the items on the US customs list had prohibitive

tariffs. In the socialist countries, prohibitive tariffs account for a negligible share of customs

revenues.

Aggressive duties are one of the types of protective tariff that set very high rates for a

particular product or group of foreign goods. They are used by the United States, France, and

the members of the Common Market. Examples are the duties established by a law passed in

the United States in 1971, which restricts the import of textiles, stereo equipment, television

sets, automobiles, footwear, and other goods from Japan and the Common Market countries.

In their turn, the members of the Common Market have adopted single-schedule tariffs of the

aggressive type in trade with other countries. This has enabled the Common Market countries

to capture a significant part of the European Economic Community market and the markets of

numerous countries in Asia and Africa from foreign rivals, primarily the United States.

Aggressive duties are also used within the European Economic Community. In 1974, for

example, Italy implemented major protectionist measures, including the introduction of

aggressive protective tariffs, and sharply reduced the importation of automobiles, as well as

meat, butter, cheese, and other consumer goods, from the countries of the European

Economic Community, particularly the Federal Republic of Germany. This policy created

better conditions for the development of certain sectors of national industry but led to a new

rise in food prices and a drop in the standard of living of the working people. Prohibitive and

aggressive tariffs are used as a weapon of super protectionism to overcome tariff barriers and

capture markets in the developing and economically underdeveloped countries.

The socialist countries use protective tariffs to bolster sectors of their economies. For

example, in the first Customs Tariff of the Land of the Soviets (1922), protective tariffs were

applied to the products of sectors, such as the leather and cotton-textile industries, that were

being rebuilt after the devastation of the war years. In 1924 a new protective tariff was

instituted. Protective duties were established for machinery and raw materials in the prewar

tariffs of the USSR of 1927, 1930, and 1932. In the new (1961) Customs Tariff of the USSR,

a large majority of the duties are no longer of the protective type.

[8]

On the Basis of Origin and Destination

Ad valorem tax

An ad valorem tax (Latin for "according to value") is a tax based on the value of real estate

or personal property. It is more common than a specific tax, a tax based on the quantity of an

item, such as cents per kilogram, regardless of price.

An ad valorem tax is typically imposed at the time of a transaction(s) (a sales tax or value-

added tax (VAT)), but it may be imposed on an annual basis (real or personal property tax) or

in connection with another significant event (inheritance tax, surrendering citizenship,[1] or

tariffs). In some countries stamp duty is imposed as an ad valorem tax.

Specific Duty

A specific duty is a tariff levied on imports, defined in terms of a specific amount per unit,

such as cents per kilogram. By contrast, an ad valorem duty is a charge levied on imports

defined in terms of a fixed percentage of value.

Compound Duty

Compound duty is an import tax consisting of both ad valorem and specific duties. It is

calculated based on both the value of the goods as well as the weight, volume or number.

On the Basis of Country-wise Discrimination

Single-column tariff

A set import duty paid on a specific item received from any country or from any member

country of a certain international agreement. The tariff amount is strictly determined by the

type of item being imported and not upon the point of origin.

[9]

Double Column Tariff:

Two different rates of duty have been imposed.

Triple Column Tariff:

Two or more tariff rates are levied on each category of commodity

[10]

Who Gain from Tariff?

Government of the importing country earns in the form of the revenue.

Industries of the importing country would find market for their products as the

imported goods will be expensive.

Jobs in the domestic markets are saved.

Business for the ancillary industry, servicing, market intermediation etc. is also

protected.

Who are adversely affected?

Consumers

Industries of the exporting country.

Other Impacts of Tariff Barriers:

Tariff Barriers tend to Increase:

1. Inflationary pressures

2. Special interests’ privileges

3. Government control and political considerations in economic matters.

Tariff Barriers tend to Weaken:

1. Balance-of-payments positions

2. Supply-and-demand patterns

3. International relations (they can start trade wars)

Tariff Barriers tend to Restrict:

1. Manufacturer’ supply sources

2. Choices available to consumers

3. Competition

[11]

Non-tariff barriers to trade

Non-tariff barriers to trade (NTBs) are trade barriers that restrict imports but are not in the

usual form of a tariff. Some common examples of NTB's are anti-dumping measures and

countervailing duties, which, although called non-tariff barriers, have the effect of tariffs once

they are enacted.

Their use has risen sharply after the WTO rules led to a very significant reduction in tariff

use. Some non-tariff trade barriers are expressly permitted in very limited circumstances,

when they are deemed necessary to protect health, safety, sanitation, or depletable natural

resources. In other forms, they are criticized as a means to evade free trade rules such as those

of the World Trade Organization (WTO), the European Union (EU), or North American Free

Trade Agreement (NAFTA) that restrict the use of tariffs.

Some of non-tariff barriers are not directly related to foreign economic regulations but

nevertheless have a significant impact on foreign-economic activity and foreign trade

between countries.

Trade between countries is referred to trade in goods, services and factors of production.

Non-tariff barriers to trade include import quotas, special licenses, unreasonable standards for

the quality of goods, bureaucratic delays at customs, export restrictions, limiting the activities

of state trading, export subsidies, countervailing duties, technical barriers to trade, sanitary

and phyto-sanitary measures, rules of origin, etc. Sometimes in this list they include

macroeconomic measures affecting trade.

Types of Non-Tariff Barriers

There are several different variants of division of non-tariff barriers. Some scholars divide

between internal taxes, administrative barriers, health and sanitary regulations and

government procurement policies. Others divide non-tariff barriers into more categories such

as specific limitations on trade, customs and administrative entry procedures, standards,

government participation in trade, charges on import, and other categories.

The first category includes methods to directly import restrictions for protection of certain

sectors of national industries: licensing and allocation of import quotas, antidumping and

countervailing duties, import deposits, so-called voluntary export restraints, countervailing

[12]

duties, the system of minimum import prices, etc. Under second category follow methods that

are not directly aimed at restricting foreign trade and more related to the administrative

bureaucracy, whose actions, however, restrict trade, for example: customs procedures,

technical standards and norms, sanitary and veterinary standards, requirements for labeling

and packaging, bottling, etc. The third category consists of methods that are not directly

aimed at restricting the import or promoting the export, but the effects of which often lead to

this result.

The different type of non- tariff barriers are as follows:

Specific Limitations on Trade:

1. Quotas

2. Import Licensing requirements

3. Proportion restrictions of foreign to domestic goods (local content requirements)

Customs and Administrative Entry Procedures:

1. Valuation systems

2. Antidumping practices

3. Documentation requirements

Standards:

1. Standard Disparities

2. Intergovernmental Acceptances of testing methods and standards

3. Packaging, labeling and marketing

Government Participation in Trade:

1. Government procurement policies

2. Export subsidies

3. Countervailing duties

4. Domestic assistance programs

Charges on imports:

1. Prior import deposit subsidies

[13]

2. Administrative fees

3. Special supplementary duties

4. Import credit discriminations

5. Border taxes

Some of the examples of non-tariffs are as follow:

Licenses

The most common instruments of direct regulation of imports (and sometimes export) are

licenses and quotas. Almost all industrialized countries apply these non-tariff methods. The

license system requires that a state (through specially authorized office) issues permits for

foreign trade transactions of import and export commodities included in the lists of licensed

merchandises. Product licensing can take many forms and procedures. The main types of

licenses are general license that permits unrestricted importation or exportation of goods

included in the lists for a certain period of time; and one-time license for a certain product

importer (exporter) to import (or export). One-time license indicates a quantity of goods, its

cost, its country of origin (or destination), and in some cases also customs point through

which import (or export) of goods should be carried out. The use of licensing systems as an

instrument for foreign trade regulation is based on a number of international level standards

agreements. In particular, these agreements include some provisions of the General

Agreement on Tariffs and Trade and the Agreement on Import Licensing Procedures,

concluded under the GATT (GATT).

The most common instruments of direct regulation of imports (and sometimes export) are

licenses and quotas. Almost all industrialized countries apply these non-tariff methods. The

license system requires that a state (through specially authorized office) issues permits for

foreign trade transactions of import and export commodities included in the lists of licensed

merchandises. Product licensing can take many forms and procedures. The main types of

licenses are general license that permits unrestricted importation or exportation of goods

included in the lists for a certain period of time; and one-time license for a certain product

importer (exporter) to import (or export). One-time license indicates a quantity of goods, its

cost, its country of origin (or destination), and in some cases also customs point through

which import (or export) of goods should be carried out. The use of licensing systems as an

instrument for foreign trade regulation is based on a number of international level standards

[14]

agreements. In particular, these agreements include some provisions of the General

Agreement on Tariffs and Trade and the Agreement on Import Licensing Procedures,

concluded under the GATT (GATT).

Quotas

Licensing of foreign trade is closely related to quantitative restrictions – quotas - on imports

and exports of certain goods. A quota is a limitation in value or in physical terms, imposed on

import and export of certain goods for a certain period of time. This category includes global

quotas in respect to specific countries, seasonal quotas, and so-called "voluntary" export

restraints. Quantitative controls on foreign trade transactions carried out through one-time

license.

Quantitative restriction on imports and exports is a direct administrative form of government

regulation of foreign trade. Licenses and quotas limit the independence of enterprises with a

regard to entering foreign markets, narrowing the range of countries, which may be entered

into transaction for certain commodities, regulate the number and range of goods permitted

for import and export. However, the system of licensing and quota imports and exports,

establishing firm control over foreign trade in certain goods, in many cases turns out to be

more flexible and effective than economic instruments of foreign trade regulation. This can

be explained by the fact, that licensing and quota systems are an important instrument of trade

regulation of the vast majority of the world.

The consequence of this trade barrier is normally reflected in the consumers’ loss because of

higher prices and limited selection of goods as well as in the companies that employ the

imported materials in the production process, increasing their costs. An import quota can be

unilateral, levied by the country without negotiations with exporting country, and bilateral or

multilateral, when it is imposed after negotiations and agreement with exporting country. An

export quota is a restricted amount of goods that can leave the country. There are different

reasons for imposing of export quota by the country, which can be the guarantee of the supply

of the products that are in shortage in the domestic market, manipulation of the prices on the

international level, and the control of goods strategically important for the country. In some

cases, the importing countries request exporting countries to impose voluntary export

restraints.

[15]

In the past decade, a widespread practice of concluding agreements on the "voluntary" export

restrictions and the establishment of import minimum prices imposed by leading Western

nations upon weaker in economical or political sense exporters. The specifics of these types

of restrictions is the establishment of unconventional techniques when the trade barriers of

importing country, are introduced at the border of the exporting and not importing country.

Thus, the agreement on "voluntary" export restraints is imposed on the exporter under the

threat of sanctions to limit the export of certain goods in the importing country. Similarly, the

establishment of minimum import prices should be strictly observed by the exporting firms in

contracts with the importers of the country that has set such prices. In the case of reduction of

export prices below the minimum level, the importing country imposes anti-dumping duty,

which could lead to withdrawal from the market. “Voluntary" export agreements affect trade

in textiles, footwear, dairy products, consumer electronics, cars, machine tools, etc.

Problems arise when the quotas are distributed between countries because it is necessary to

ensure that products from one country are not diverted in violation of quotas set out in second

country. Import quotas are not necessarily designed to protect domestic producers. For

example, Japan, maintains quotas on many agricultural products it does not produce. Quotas

on imports is a leverage when negotiating the sales of Japanese exports, as well as avoiding

excessive dependence on any other country in respect of necessary food, supplies of which

may decrease in case of bad weather or political conditions.

Export quotas can be set in order to provide domestic consumers with sufficient stocks of

goods at low prices, to prevent the depletion of natural resources, as well as to increase export

prices by restricting supply to foreign markets. Such restrictions (through agreements on

various types of goods) allow producing countries to use quotas for such commodities as

coffee and oil; as the result, prices for these products increased in importing countries.

A quota can be a tariff rate quota, global quota, discriminating quota, and export quota.

Embargo

Embargo is a specific type of quotas prohibiting the trade. As well as quotas, embargoes may

be imposed on imports or exports of particular goods, regardless of destination, in respect of

certain goods supplied to specific countries, or in respect of all goods shipped to certain

[16]

countries. Although the embargo is usually introduced for political purposes, the

consequences, in essence, could be economic.

Dumping

In economics, "dumping" is a kind of predatory pricing, especially in the context

of international trade. It occurs when manufacturers export a product to another country at a

price either below the price charged in its home market, or in quantities that cannot be

explained through normal market competition. A standard technical definition of dumping is

the act of charging a lower price for the like goods in a foreign market than one charge for the

same good in a domestic market for consumption in the home market of the exporter. This is

often referred to as selling at less than "normal value" on the same level of trade in the

ordinary course of trade. Under the World Trade Organization (WTO) Agreement, dumping

is condemned (but is not prohibited) if it causes or threatens to cause material injury to a

domestic industry in the importing country

Standards

Standards take a special place among non-tariff barriers. Countries usually impose standards

on classification, labeling and testing of products in order to be able to sell domestic products,

but also to block sales of products of foreign manufacture. These standards are sometimes

entered under the pretext of protecting the safety and health of local populations.

Administrative and bureaucratic delays at the entrance

Among the methods of non-tariff regulation should be mentioned administrative and

bureaucratic delays at the entrance, which increase uncertainty and the cost of maintaining

inventory.

Government procurement

Government procurement, also called public tendering or public procurement, is

the procurement of goods and services on behalf of a public authority, such as

[17]

a government agency. With 10 to 15% of GDP in developed countries, and up to 20%

in developing countries, government procurement accounts for a substantial part of the global

economy.

To prevent fraud, waste, corruption or local protectionism, the law of most countries regulates

government procurement more or less closely. It usually requires the procuring authority to

issue public tenders if the value of the procurement exceeds a certain threshold.

Government procurement is also the subject of the Agreement on Government Procurement,

a plurilateral international treaty under the auspices of the WTO.

Countervailing duties 

Countervailing duties (CVDs), also known as anti-subsidy duties, are trade import duties

imposed under World Trade Organization (WTO) Rules to neutralize the negative effects

of subsidies. They are imposed after an investigation finds that a foreign country subsidizes

its exports, injuring domestic producers in the importing country.

Import deposits

Another example of foreign trade regulations is import deposits. Import deposits is a form of

deposit, which the importer must pay the bank for a definite period of time (non-interest

bearing deposit) in an amount equal to all or part of the cost of imported goods.

At the national level, administrative regulation of capital movements is carried out mainly

within a framework of bilateral agreements, which include a clear definition of the legal

regime, the procedure for the admission of investments and investors. It is determined by

mode (fair and equitable, national, most-favored-nation), order of nationalization and

compensation, transfer profits and capital repatriation and dispute resolution.

Foreign exchange restrictions and foreign exchange controls

Foreign exchange restrictions and foreign exchange controls occupy a special place among

the non-tariff regulatory instruments of foreign economic activity. Foreign exchange

restrictions constitute the regulation of transactions of residents and nonresidents with

[18]

currency and other currency values. Also an important part of the mechanism of control of

foreign economic activity is the establishment of the national currency against foreign

currencies.

Impact of NTBs:

Have emerged as potent Protectionist tool.

It being less transparent, its difficult to identify and quantify its impact.

[19]

BIBLIOGRAPHY

1. http://www.wisegeek.com/what-are-tariff-barriers.htm

2. http://en.wikipedia.org/wiki/Non-tariff_barriers_to_trade

3. http://en.wikipedia.org/wiki/Tariff

4. http://en.wikipedia.org/wiki/Trade_barrier

5. http://www.slideshare.net/nbairstow/international-tariffs-and-non-tariff-barriers

6. http://www.economist.com/node/11586026

7. https://www.google.co.in/url?

sa=t&rct=j&q=&esrc=s&source=web&cd=10&cad=rja&ved=0CHYQFjAJ&url=http

%3A%2F%2Fwww.farmfoundation.org%2Fnews%2Farticlefiles%2F816-

sumner.pdf&ei=Ya8gUZSWDJDorQenh4GICw&usg=AFQjCNG_q8LB70htCfjtsDzb

2dYVj2Rv-A&sig2=uTOsWUe0KfxTR1r6dr8q2Q&bvm=bv.42553238,d.bmk

8. http://www.tradebarriers.org/ntb/non_tariff_barriers

9. Google images

[20]