Basic Text. Regulation of International Trade (Factors Decreasing the Level

Of International Trade)

A) Trade barriers

No matter how compelling the logic of the case for free trade is, in fact a wide variety of barriers

To free trade do exist.

— Tariffs are excise taxes on imported goods; they may be imposed for purposes of revenue or

Protection of local firms. Revenue tariffs are usually applied to products which are not produced

Domestically, for example, tin, coffee, and bananas in the case of the United States. Rates on

Revenue tariffs are typically modest and their purpose is to provide the federal government with tax

Revenues. Protective tariffs, on the other hand, are designed to shield domestic producers from

Fo reign competition. Protective tariffs usually put foreign producers at a competitive disadvantage

In selling in domestic markets and sometimes stop importing a product.

— Import quotas specify the maximum amounts of commodities which may be imported in any

Period of time. Frequently, import quotas are more effective in retarding international commerce

Than are tariffs. A given product might be imported in relatively large quantities despite high tariffs;

Low import quotas, on the other hand, completely prohibit imports once the quotas are filled.

— Nontariff barriers (NTBs) refer to licensing requirements, unreasonable standards pertaining