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2010 39www.vasantkothari.com


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Protection stands for restrictions imposed on the

import of foreign goods.

All these governmentally imposed barriers are

imposed through the political pressures of business for

protection of their markets.

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Mechanics of Protectionism

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The theoretical and logical arguments for free trade

have equal validity in all countries, yet the international

trader must face the reality

that we lives in a world of

tariffs, quotas and non-tariff

barriers.

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Protection of Infant Domestic Industry

Conservation of Natural Resources

Protection of Home market

Need to keep Money at Home

Reduction of Unemployment

National Defence

Retaliation and Bargaining

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An economy with strong cost advantage in

manufactured goods or having capacity to manufacture

more goods, enjoying high standard of living will prefer

free trade.

Similarly a country with a monopoly will also preferfree trade.

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But restrictions on trade may be necessary for

developing countries to encourage its industrial

production and also to increase employment and

economic activity.

In an economy depending primarily on agriculture,protection also helps in diversification of its production

activities

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Trade barriers may be

Tariff Barriers and

Non Tariff Barriers

or protective barriers

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Trade Barriers



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To Protect Home Industries from Foreign

Competition

To Promote New Industries and Research and

Development

To Conserve Foreign Exchange Reserves

To Maintain Favourable Balance Of Payments

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Objectives



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To Protect National Economy from Dumping

To Curb Conspicuous Consumption

To Make Economy Self-reliant

To Mobilise Public Revenue

To Counteract Trade Barriers Imposed By Other

Countries

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Objectives



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Tariff barriers have been

one of the classical

methods of regulating

international trade.

Tariffs may be referred to

as taxes on the imports.

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Tariff Barriers



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It aims at restricting the inward flow of goods from

other countries to protect the countrys own industries

by making the goods costlier in that country.

Sometimes the duty on a product becomes so steep

that it is not worthwhile importing it.

In addition, the duty so imposed also provides a

substantial source of revenue to the importing country.

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Tariff Barriers



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Tariffs may be classified according to

the purpose

Revenue Tariff- Increases Govt. revenue

Protective Tariff- protects domestic industry

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Tariff Barriers



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how they are levied.

Counter active Tariff-Similar to anti-dumping

Specific Tariff - based on per units/ Vol./

Length/number of goods

Ad valorem Tariff - based on certain

percentage of FOB/CIF value

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Tariff Barriers



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To protect the domestic

industries against unfair

competition and to give them a

fair chance of survival various

countries are adopting non-tariff

measures.

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Non Tariff Barriers



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Some of these are :

Quantity Restrictions, Quotas and Licensing

Procedures

Foreign Exchange Restrictions

Technical Regulations

Consular Formalities

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Non Tariff Barriers



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2010 54

Comparison



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2010 55

Regional Trade

Alliances, Markets,

and Agreements



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2010 56

International Institutions by

purpose



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2010 57

United Nations

http://images.google.com/imgres?imgurl=http://www.st-minutiae.com/academy/anthropology114A/un.gif&imgrefurl=http://www.st-minutiae.com/academy/anthropology114A/&usg=__Ez6bgbCXVFpH_D4-tJu6_RRANuA=&h=800&w=800&sz=63&hl=en&start=2&tbnid=Jxnqr72Ok-ni0M:&tbnh=143&tbnw=143&prev=/images?q=United+Nations&gbv=2&hl=en


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2010 58

The North American Free Trade Agreement (NAFTA)



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Pacific Rim Nations



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North Atlantic TreatyOrganization (NATO)



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Collective Security Treaty Organization (CSTO)

http://www.worldstatesmen.org/int-csto.gif


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2010 64

Association of Southeast Asian Nations (ASEAN)



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European Free Trade Agreement (EFTA)



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African Trade Agreements (ATA)

http://upload.wikimedia.org/wikipedia/commons/8/83/CAFTA_members.svg


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2010 67

Central American Free

Trade Agreement (CAFTA)

http://upload.wikimedia.org/wikipedia/commons/8/83/CAFTA_members.svg


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2010 68

Andean Community (CAN)



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ASIA-Pacific Economic Cooperation



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Organisation For Economic

Cooperation and Development



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Central American Common Market - CACM



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Caribbean Common Market - CARICOM



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2010 74

Gulf Cooperation Council (GCC)



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Rule Of Internationalization

BE COMPETITIVE!

BE PROACTIVE!

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