Tariff and non tariff trade barriers

Tariff and non tariff trade barriers INTRODUCTION Despite all the evident benefits of international trade, governments have a tendency to put up trade barriers to protect the domestic industry. There are two kinds of barriers: tariff and non-tariff. Tariff Barriers Tariff is a tax levied on goods traded internationally, that is on imports. As a result, the price level of imported products rises and the demand for them decrease, thus imports are less. Non-tariff Barriers Non-Tariff Barriers (NTBs) include all the rules, regulations and bureaucratic delays that help in keeping foreign goods out of the domestic markets. Baldwin  [1]  defined a non-tariff distortion as any measure (public or private) that causes internationally traded goods and services, or resources devoted to the production of these goods and services, to be allocated in such a way as to reduce potential real world income. The WTO After the World War II, many countries focused on protecting home industries. So, international trade was hampered by severe trade restrictions. To remedy this situation, twenty-three nations joined together in 1947 and signed the General Agreement on Tariffs and Trade (GATT), which stimulated free trade by regulating and lowering tariffs. The work of GATT is sustained by the World Trade Organization (WTO) which encourages global commerce and reduces trade barriers. Tariffs on goods and services have been reduced to low levels through eight successive rounds of the WTO; still there has been a significant increase of Non-Tariff Measurements which are seriously hindering trade. Countries use many mechanisms to restrict imports. NTBs have gained importance as tariff levels have been reduced worldwide. They are the greatest single threat to a liberal world trading system and they are becoming more widespread: the percentage of industrial countries total imports subject to NTBs rose from 25% in 1981 to 27% in 1983 and they are even higher today. NTBs are therefore one of the most important issues in the round of international trade negotiations. TYPES OF NON-TARIFF BARRIERS Non- Tariff Barriers to trade can be categorized in six types: Specific Limitations on Trade: Quota shares A quota is a restriction in value or in physical terms, imposed on import and export of certain goods for a certain period of time. For example, the US has imposed a quota on textiles imported from India and other countries. Import licenses/ Restrictive licenses Import licensing can be defined as administrative procedures requiring the submission of an application or other documentation, other than those required for customs purposes, to the relevant administrative body as a prior condition for importation of goods  [2]  . For example, in Washington, cheese and cheese products are subject to the requirements of the Food and Drug Administration and the Department of Agriculture and most importations of cheese require an import license and are subject to quotas administered by the Department of Agriculture, Foreign Agricultural Service  [3]  . In Mauritius, pesticides require import licence from the Ministry of Health, arms and ammunitions require import permit from the police and many others.  [4]   Exchange controls This is monitoring the amount of foreign exchange available to residents for purchasing foreign goods domestically or while travelling abroad is another way of restricting imports. 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 currency and other currency values. Import bans/ limitations This is a government order forbidding imports of a specific kind or from a particular country. For example, in order to protect the domestic manufacturers against cheap competition from the neighboring country, the government of India imposed ban on the import of Chinese toys. Moreover, many countries, like for example India, have impose a ban on food imports from Japan fearing contamination. Furthermore following a milk scandal that led to the widespread poisoning of babies in China, India banned the import of milk and milk products from China. Embargoes Embargo is a particular type of quotas prohibiting the trade, in other words, when imports from a specific country are totally banned. It is mostly put in place due to political reasons. For example, the United Nations imposed an embargo on trade with Iraq as a part of economic sanctions in 1990. Customs and Administrative Entry Procedures Customs Valuation There is a commonly held view that the invoice values of goods traded internationally do not reflect their real cost. This gave rise to a very subjective system of valuation of imports and exports for levy of duty. If the value ascribed to a particular product would turn out to be considerably higher than its real cost, it could end in affecting its competitiveness by increasing the total cost to the importer due to the excess duty. This would hence act as a barrier to international trade. Antidumping practice If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be dumping the product. Antidumping is prohibiting a country to dump, that is, to export goods at usual lower prices. Documentation requirements This is when complicated and unnecessary documentation requirements are asked by the importing countries. In Mauritius, according to the Mauritius chamber of commerce and Industry of Mauritius, these imports documents are required; invoice, showing the FOB and CIF value of goods; packaging lists; bill of lading; bill of entry; and where applicable; insurance certificate, certificate of inspection, certificate of origin and imports permits  [5]  . Rules of origin Determining where a product comes from is no longer easy when raw materials and parts across the globe are used as inputs in the manufacturing plants. Rules of origin are important in implementing such trade policy instruments as anti-dumping and countervailing duties, origin marking, and safeguard measures. Technical barriers to trade Technical Barriers Countries generally specify some quality standards to be met by imported goods for various health, welfare and safety reasons. In Mauritius, rice (imported by traders other than the State Trading Corporation) should not exceed 10% broken rice, bakery additives shall not contain potassium bromate as an ingredient  [6]  , etc. This facility can be misused for blocking the import of certain goods from specific countries by setting up of such standards, which deliberately exclude these products. The process is further complicated by the requirement that testing and certification of the products regarding their meeting the set standards be done only in the importing country. The Precautionary Principle The precautionary principle, is a government restrictions on trade in the context of environmental and health concerns, often regardless of cost or scientific evidence. The precautionary principle has been interpreted by some to mean that new chemicals and technologies should be considered dangerous until proven otherwise. It therefore requires those responsible for an activity or process to establish its harmlessness and to be liable if damage occurs. Sanitary and phyto-sanitary conditions This is a restriction on imports from certain places in order to protect consumers, the environment, or agriculture from harmful diseases or pests that may accompany the imported product. For instance, in Mauritius, agricultural goods require a phytosanitary certificate from the ministry of Agriculture, prepared foods, drugs, and chemicals with potential adverse effects on health require phytosanitary certificate from the Ministry of Health.  [7]   Packaging conditions, labeling conditions and product standards. 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 occasionally entered under the excuse of protecting the safety and health of local populations. In Mauritius, the establishment in charge for the control of standards mainly for food and other items is the Mauritius Standards Bureau. In addition, European exporters and investors are facing an increasing number of unjustifiable non-tariff barriers in the form of product certification, labeling standards, import approval requirements and customs clearance delays. Also, many of the Chinese standards such as the CCC standard require certification by the Chinese authorities before a product can be put on the Chinese market. Important information has to be submitted and the factory has often to be inspected at the expense of the exporter. Government Participation in Trade Complex regulatory environment Some countries have complex regulatory framework, for e.g. complex business registration and license, and thus this hamper free trade. For instance, rules recently enacted in China, prohibit European financial information agencies and operators to sell directly their services customers in China. Government procurement policies This is another type of NTB where governments pretty frequently follow the policy of procuring their requirements (including that of government-owned companies) only from local producers, or at least extend some price advantage to them. This closes a big potential market to the foreign producers. Subsidies to Local Goods This occurs when governments directly or indirectly subsidize local production in an effort to make it more competitive in the domestic and foreign markets. For example, tax benefits may be extended to a firm producing in a certain part of the country to reduce regional imbalances, or duty drawbacks may be allowed for exported goods, or, as an extreme case, local firms may be given direct subsidies to enable them to sell their goods at a lower price than foreign firms. Countervailing duties This is a duty placed on imported goods that are being subsidized by the importing government. This helps to even the playing field between the domestic producers and the foreign producers receiving subsidies. Buy national policy This is a policy hosted by the government to help the national economy. For instance, in 2009, the Paraguayan Finance Ministry specified changes to public procurement policy in relation to the national stimulus plan. That is, public bodies that seek to spend money from the stimulus money are to give preference to national goods and services. More specifically, domestic goods shall receive a preferential margin of 70 percent over imported products. In terms of labor, the announcement declares that at least 70 percent of the labor involved in stimulus projects shall come from local employees living in the territory of the contracting public authority. Charges on imports Variable import levy A  variable import levy  is a  levy  on imports that raises their price to a level at least as high as the domestic price. Such levies are adjusted frequently in response to changes in world market prices, and are imposed to defend administered prices set above world market prices. Under the  Uruguay Round Agreement on Agriculture, the variable levies of the EU have been converted into fixed tariffs or tariff-rate quotas. Border taxes It is a tax system for imports and exports, especially one that compensates for internal taxes in Common Market countries by levying fees or paying rebates. Others Voluntary Export Restraints This is an act of limiting exports. It happens when a country facing a persistent huge trade deficit against another country pressurized the latter to adhere to a self-imposed limit on the exports. For instance, after facing consistent trade deficits over a number of years with Japan, the US persuaded it to impose such limits on itself. Direct and Indirect Restrictions on Foreign Investments A country may directly restrict foreign investment to some specific sectors or up to a certain percentage of equity. Indirect restrictions may come in the form of limits on profits that can be repatriated or prohibition of payment of royalty to a foreign parent company. These restrictions discourage foreign producers from setting up domestic operations. Foreign companies are generally interested in setting up local operations when they foresee increased sales or reduced costs as a consequence. Thus, restrictions against foreign investments add impediments to international trade by giving rise to inefficiencies. PROBLEMS CAUSE BY NTBs The reduction of tariffs in progressive rounds of trade liberalization at the multilateral and regional levels has been mirrored by the rise to prominence of NTBs. NTBs for instance specific limitations on trade and charges on imports such as quotas, import ban and so on, will directly affect trade negatively as they will impact on exporting countries by decreasing or prohibition their exports. Although embargo is usually introduced for political purposes, the consequences, in essence, could be economic. This decrease or ban in exports, if it was of an important quantity/ value, will create serious economic catastrophe for the exporting countries and may result in Balance of Payments deficiency, a decrease in GDP, an increase in the level of unemployment and if nothing is done to remedy the situation, the country can go in a recession. NTBs in the customs and administration entry procedures category and in the standards category do not directly hamper free trade but they add to business cost. These testing procedures being expensive, time consuming and cumbersome to the exporters, act as a trade barrier. This will eventually raise their costs, leading to higher prices thus making them less competitive at international level, and small and medium enterprises may be discouraged to export. A vivid example is in Iran where  NTBs negatively impact on the trade of pistachio and shrimp products. The most important reasons for the reduced export of these products are Sanitary Phyto-Sanitary (SPS) and Technical Barriers (TB). According to WTO rules, countries are allowed to adopt regulations under the SPS and TB agreements in order to protect human, animal and plant health as well as the environment, wildlife and human safety.  [8]   However, by imposing NTBs, both counties will lose, that is, the country which imposes the NTMs also loses. This can be demonstrated by the following facts: for instance, Japanese consumers pay five times the world price for rice because of import restrictions protecting Japanese farmers. American consumers also suffer from the same double burden, paying six times the world price for sugar because of trade restrictions. Hence, allowing free trade in a way will benefit everyone. European consumers pay dearly for restrictions on food imports and heavy taxes for domestic farm subsidies.  [9]   HOW TO REDUCE NTBS The action should start from the top, that is, from the WTO itself. The WTO has already reached some agreements like the Anti-dumping Agreement, SPS agreements, technical barriers agreements and many other agreements. Moreover, RTAs is the first step to reduce NTBs, as it is easier to get the consensus of all an RTA members on a matter that the consensus of all the WTO members. In addition, RTAs normally constitute of country members with a similar/ more or less the same economic background. For instance, in ASEAN, most members are from developing countries while EU has members from developed countries. As a result, removing NTBs will benefits all the members equivalently. For example, there has already been an agreement on the general features of the process for eliminating NTBs in ASEAN. The process Involves, verification of information on NTBs, prioritisation of products/NTBs, developing specific work programmes, and obtaining a mandate from the ASEAN Economic Ministers to implement the work programme.  [10]   In addition, different RTAs have different methods of reducing NTMs. Such as, the Working Party on Regulatory Cooperation and Standardization Policies aims at building a shared regulatory framework and at achieving greater security for consumers and workers, better protection for the environment and reduced cost for international trade.  [11]  They also developed standards for agricultural produce that define minimum quality requirements in order to facilitate the trading process. CONCLUSION Free trade, will surely benefits many countries. Thus in order to allow trade to occur freely, tariffs as well as non-tariff barriers need to be reduced. However, sometimes for safety reasons, some NTMs are required. For instance the import ban on food from Japan is necessary in order to avoid the proliferation of the radioactive contamination. Thus some trade restrictions may be necessary for countries to ensure the safety of the food supply and the health of plants, animals and the environment. However, sometimes governments go beyond what is necessary to protect domestic industries.   Moreover, free trade can increase the poverty gap. This is so because developing countries and LDCs will not be able to compete with developed countries and multinationals may implant themselves in the LDCs just to reap the benefit of cheap labour and resources and does not contribute more to the development of those LDCs.

Salem :: essays research papers

The Salem Witchcraft Trials: A Time of Fear and Confusion   Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Imagine, just for a minute, living in a time and place where you are not free to practice your own religious or spiritual beliefs and you are forced to live in fear because of persecution by the church and everyone around you. Persecution back in 1692 in Salem Massachusetts was a very real, very serious thing. Those persecuted were hanged, burned, and even pressed against rocks if found guilty of witchcraft. The Salem Witchcraft Trials stands as one of the darkest times in American history of religious tolerance.   Ã‚  Ã‚  Ã‚  Ã‚  The Salem Witchcraft Trails were caused and continued by various events and people. Diseases, natural catastrophes, misfortune, and deaths seemed to be around every corner for the people that lived in Salem. Instead of writing these events off as bad luck people in Salem blamed these horrible things on the Devil. The people of the town believed that the Devil recruits witched and wizards to do his work for him. As soon as something bad happened, the God-fearing people of Salem were quick to blame it on a witch or wizard. Anything a little out of the ordinary like children claiming to see things that someone else could not was blamed on a witch. The people seemed to be always out to find a witch in hopes of stopping their misfortunes. They believed that once the witch was executed all the bad luck they were experiencing would disappear. Since their bad luck never disappeared their witch hunt would not soon be satisfied. The whole tragic trials were apparently started when several young girls were found playing with a ball made of crystal. Only trying to escape their punishment, they claimed to have been forced to do so by a witch. The church tried to seek out and punish the witch or wizard responsible for tormenting the girls and thus started this whole out of control event. The minister of the town, Samuel Parris, not only didn’t help the problem, but added fuel to the fire by telling the town that witches were everywhere and that no one could be trusted. Since people were allowed to testify in court about spirits talking to them, everyone backstabbed each other in order to financially gain another’s property. If you were convicted of being a witch the only way to escape death was to confess.

Why Foreign Aid Is Hurting Africa

Benefield, Alicia February 14, 2013 INR3932-03 Paper 1 Why Foreign Aid is Hurting Africa In this article Dambisa Moyo, is arguing that money, in the form of aid given to African nations has not only trapped many of these nations in debt, but has started a cycle of corruption as well as slowed down economic growth and poverty. To solve this isuue Moyo suggests cutting off the flow of aid to these African nations. Many developed countries will gladly give aid to Africa, these countries do not give small donations they donate by the millions.This continued donation of aid has only been putting Africa further in debt. What many do not realize is that aid is not given to Africa freely, the African nations receiving aid must pay this money back plus interest. Moyo provided an example of this stating that â€Å"African countries still pay close to $20 billion in debt repayments per annum, a stark reminder that aid is not free. In order to keep the system going, debt is repaid at the expens e of African education and healthcare† (Moyo, 2009). This is what is slowing down economic growth and keeping those countries in poverty.A country can not achieve econmic growth if its workforce is not educated, an uneducated workforce means the people in the country have little to no skills. Certain skills are required to get better jobs, if the people are not being adequately educated they will be forced to remain in a state of poverty. Healthcare is alo important, and the countries keep cutting the healthcare budget. If your workforce is not healthy enough to go out and work to spark the economy you can never expect to achieve economic growth. Education and healthcare budget cuts are not the only problems Moyo discussed that are keeping African nations from developing.Other issues include corruption in the government and developed nations supplying resources for free keeping African producers out of the market. According to the African Union, an organization of African nati ons â€Å"In 2002, it was estimated that corruption was costing the continent $150 billion a year, as international donors were apparently turning a blind eye to the simple fact that aid money was inadvertently fueling graft† (Moyo, 2009). This is because the donations are being given with â€Å"no strings attached† so the funds are being used for everything except what they were meant for, development.Political elites are using these funds to finace their own expidentures as well as financing their families and home life. The other problem is countries like the U. S. Implementing programs like the U. S. Food for Peace program, which buys American food and ships it overseas to African nations. This program is not helpful, it is a hinderance to Africas economic growth. By supplying American food for free, the U. S. is putting African farmers out of business. Moyo suggests that instead of purchasing American food, they U. S. ould purchase food from the African farmers to distribute to the African nations. Done this way the African farmers are benefitting from the program and are able to compete in the market. The opinions presented in this article relate to many of the concepts we have touched on in this course; views on poverty, the development, as well as the international aid system. The article opens up stating â€Å"A month ago I visited Kiberam the larget slum in Africa† (Moyo, 2009). When we hear the word slum, we perceive a negative connotation and relate this term with a place in poverty.We can see the inequalities between developed and undeveloped nations, according to the article â€Å"a mere 2% of the country's population has access to mobile phones compared to a wireless survey that found 91% of Americans have access to cellphones (Moyo, 2009) (Forseman, 2010). This is a huge inequality African citizens are not even close to being equal to the technology avaliable to American citizens. Another concept this article discussed is development, Africa has been trying to become a developed nation for years and after receiveing billions in aid this country has yet to become a developed nation.The contry remaing in poverty is mainly because if the international aid system. This system continues to allow African nations to receive donations without the country even showing any signs of growth or development. This continuous acceptance of aid is keeping African nations in poverty. ‘ I agree with the author of this article in all of the arguments he gave on why foreign aid is hurting Africa. Developed countries are continously give large donations to the country year after year and there is no progress being made. However, I do not fault Africa for this lack of progress, they are only doing what any nation in their situation would do.They are continuously being given money and not required to put the money towards efforts to achieve economic growth, they know that the aid is not going to stop being donated so it is in their best interest to remain in a state of poverty and continue receiving aid. The countries donating to Africa are not providing the country with opportunitites to become a pro-market governnment because they are donating goods for free and taking African producers out of business. The politicians in Africa are not being closely watched and are not looking out for the social welfare of the country, but are looking out for themselves.Africa needs a more accountable government that is concerned about the people and the future of the country as well as their economy. Once these nations stop receiving aid, get better leaders, and African producers are able to tap into the market the country will be on the way to achieveing economic growth. Works Cited Foresman, C. (2010)Wireless survey: 91% of Americans use cell phones. [online] Available at: http://arstechnica. com/tech-policy/2010/03/wireless-survey-91-of-americans-have-cell-phones/ [Accessed: 15 Feb 2013]. Moyo, D. (2009) Why Foreign Aid is Hurting Africa . The Wall Street Journal, p. W1.

The Adventures Of Huckleberry Finn By Mark Twain - 1854 Words

The Adventures of Huckleberry Finn by Mark Twain is a one of a kind novel. The novel has been debated as controversial since it has been published in 1986. It has been considered racist, due to the â€Å"n† word. In its earlier days, racist people felt this book was a disgrace, because of the mingling of the two main characters. Among all of the negative comments, this book is truly a masterpiece. It is an unforgettable and enjoyable book for everyone to learn and scrutinize; it contains a multitude of literary devices that makes this American Novel a classic with a meaningful American Story. The major literary devices in The Adventures of Huckleberry Finn include historical context, dialect, and autobiographic. The characterization of Huck and†¦show more content†¦The literary device, historical context can bee seen throughout this novel. â€Å"The book’s main plot evolved around the escape of Jim, a slave† (Wiener 36). Therefore, this book used the his toric details of slavery and escaping from enslavement. Jim tells Huck that he has run off because Mrs. Watson was talking to a nigger trader about selling him for 600 dollars to New Orleans (Twain 53-54). Slaves were often traded off for money, and were forced to leave their family and friends without a say so. Jim was not going to tolerate the situation so he ran off in hopes of being free. Jim stated to Huck, he would go to a free state, save all his money to buy his wife and two children and would do anything it takes to get them (Twain 100-101). This was a plan many men did to help their families to get out of slavery. The historical context in the story illustrated the setting and time period, the 19th century. In the South during the 19th century, there was a distinctive dialect people had based off where people lived and their race. Characters such as Huck and Jim had a different dialect, and others as well. Jim would state â€Å"I reck’n I know what I knows† (Twain. 90). He had an African American language style. While Huck would use reckon instead, a more southern white language style. â€Å"Mark Twain distinguished the characters by their speech† (McKay76). This exemplified the difference between the