trade barriers

TARIFF, CUSTOMS AND TARIFF, CUSTOMS AND OTHER TRADE OTHER TRADE

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TARIFF, CUSTOMS AND OTHER TARIFF, CUSTOMS AND OTHER TRADE BARRIERSTRADE BARRIERS

As markets have become more open, goods from different countries varied and free trade advocates are almost every where in the regions to advance the cause of liberalizing the flow of goods in the markets. But no matter how strong and compelling its benefits and logic, barriers to trade exist.


Under the principle of protectionism, the government uses many methods to restrict international trade. As long as the power to regulate trade belongs to the legislature, where politics are more dominant and lies more than economics, protectionist policy remains in the halls of Congress and liberalist policy to freer trade remains in the four walls of a classroom, government intervention restircs trade.


1. Tariffs – talking the side of history, tariff is the oldest method of governments attempt to control trade. Tariff is a form of tax levied on goods imported into the country. The economic is that, by levying a higher tariff in a particular class of goods, the more trade is restricted has the effect of keeping out these goods in a domestic market of a country.


2. Non-Tariff Barriers – This includes any form of government action that hampers or reduces the entrance of imported commodities in a country.

TARIFF, CUSTOMS AND OTHER TARIFF, CUSTOMS AND OTHER TRADE BARRIERSTRADE BARRIERSA. Quotas – another hindrance for freer

international trade. A Quota limitation on the amount or quantity of commodity or commodities that may be imported in any given period. Authorities believe that quotas on imports are more effective barrier and may retard international trade than the imposition of tariffs.

Example : 1. Garments & Textiles Export Board (GTEB), imposes quota for the import or export of garments and textiles in and out of the Philippines.

TARIFF, CUSTOMS AND OTHER TARIFF, CUSTOMS AND OTHER TRADE BARRIERSTRADE BARRIERSB. Products Standards – These are

government regulations to check the correct or proper standard of the goods imported as to its quality and safety. These standards are more present in home use commodities like LPG, bulbs and other electrical and home appliances.

Example: The Bureau of Product Standard (BPS), requires importers to have certain imported articles covered by mandatory standards undergo product verification and testing in the BPS before it will be finally released from the Bureau of Customs.

TARIFF, CUSTOMS AND OTHER TARIFF, CUSTOMS AND OTHER TRADE BARRIERSTRADE BARRIERSC. Licensing Requirements – These are

regulatory permits that importers and/or distributors need to obtain before they can be allowed to engage in the importation and/or distribution of these imported products.

Example: Bureau of Foods and Drugs Administration (BFAD), subjects importers to prior registration requirement of their company and the products they are importing.


D. Bureaucratic Customs Process – Customs administration of a country may apply or burdensome customs process that a certain imported products may pass through before its final clearance from customs.

Example: Policy or requirement issued by the Bureau of Customs prior to the release of certain commodity. Electronic articles/commodity required to pass through the office of the collector of customs for verification and check of the clearance or requirement.


E. Voluntary Restraints - Voluntary export restrictions entered into the government or private export firms to limit international trade for certain products in a particular period. Its purpose is to prevent or avoid further trade restrictions (maybe in a form of higher tariff, documentations or permits or additional customs process.) from the government itself due to the influx (over supply) of the goods entering the country.


It may also be entered to control the over supply of goods available in a certain market. This kind of trade barrier is like a quota, but the former differ in the sense that it is negotiated or entered into voluntarily by governments or export firms, unlike which must be passed or sanctioned by the Congress of a country imposing quotas.


1. Voluntary Government Restraint Agreements –

- Entered into by one government to another government of a country to limit or restrict the export of a certain goods from each other.


2. Voluntary Export Restraint Agreement

- - Entered into by the exporters themselves from country to country to limit or restrict the export of their products either one way or from each other in a particular usually in a particular period.

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