Answer to Question #51789 in Economics for rini

Question

Explain the relationship between WTO policies and instruments of trade policies.

Answer 1

All trade policy instruments can be classified into several main groups:
- Tariffs or duties;
- Import quotas;
- Non-tariff barriers;
- Voluntary export restraints;
- Export subsidies and countervailing duties;
- Dumping or anti-dumping measures.
The main focus of the WTO is the liberalization of international trade. It is expressed in the conclusion of agreements aimed at reducing the rates of tariffs and the gradual elimination of non-tariff barriers. To this end, the WTO regulates the establishment of customs procedures, the introduction of national standards and sanitary norms. WTO countries are obliged to eliminate non-tariff trade barriers, replacing their customs duties, or, as they say, their tariff equivalents. This phenomenon is called tariff trade barriers. And since the WTO at the same time conducts a consistent policy to reduce customs duties, not only the comparison of the levels of trade barriers between countries is facilitaed, but also obstacles to international trade become less noticeable. Non-tariff trade policy instruments used by the WTO to ensure the safety and quality of the products, limit an access to the domestic market malware products in order to protect public health, animals, plants and improve environmental protection. Along with the elimination of trade barriers the responsibility of the WTO includes establishing rules governing state support for national producers. First of all, we are talking about government subsidies to production and exports, especially because it violates the principles of free competition. Issues on subsidies are regulated by the WTO Agreement on Subsidies and Countervailing Measures (SCM). Anti-dumping duties are designed to eliminate the influence of underpricing by foreign suppliers. They are appointed in addition to the normal import duties. Another way to normalize the situation is the adoption of exporters commitment not to lower the price below a specified level in the course of consultations.