Answer to Question #49382 in Macroeconomics for shana

Question #49382
what are four barriers to international trade
Expert's answer
The most common barriers to trade are tariffs, quotas, and nontariff barriers.

A tariff is a tax on imports, which is collected by the government and which raises the price of the good to the consumer. Also known as duties or import duties, tariffs usually aim first to limit imports and second to raise revenue.

A quota is a limit on the amount of a certain type of good that may be imported into the country. A quota can be either voluntary or legally enforced.

A tariff raises the price of the foreign good beyond the market equilibrium price, which decreases the demand for and, eventually, the supply of the foreign good. A quota limits the supply to a certain quantity, which raises the price beyond the market equilibrium level and thus decreases demand.

The effect of tariffs and quotas is the same: to limit imports and protect domestic producers from foreign competition.

Non-tariff barriers to trade include licenses, unreasonable standards for the quality of goods, bureaucratic delays at customs, export restrictions,limiting the activities of state trading, export subsidies, countervalling duties, technical barriers to trade, sanitary and phyto-sanytary measures,rules of origin,etc One of the most commonly used nontariff barriers are product standards, which may aim to serve as “barriers to trade.”

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