Types of Trade Barriers

There are many types of foreign trade barriers that can restrict or delay international exchange of products and services.

Import Policies. To ensure smooth international transactions it is important to take a proactive rather than reactive approach. It is essential to follow policies and keep transactions smooth and delays to a minimum when transporting products to your customers. Policies to adhere to can include: paying tariffs, obtaining licenses, meeting custom requirement.

Disregarding regulations or policies can result in delayed shipments, lead to fines, and if the offense is serious enough, it could be grounds for product seizure and even prosecution. Businesses interested in international trade should be aware of fees such as tariffs, licenses, and regulations for which they are responsible.

Meeting Government Regulations. It is necessary to meet regulations applicable to specific products or services.

Governmental Procurement Policies. Procurement problems may arise when trying to import or export products. One area that businesses sometimes have difficulty with is trying to bid on foreign contracts, but are not able to because of a variety of reasons. These reasons can include problems such as bid deadlines or contract liabilities etc.

Export Subsidies. Sometimes the U.S. government subsidizes export activity for specific products to encourage international trade. The subsidies are meant to help strengthen the businesses competitive position within the international markets. Other help may come in the form of export financing in special circumstances.

Intellectual Property Protection. Insufficient intellectual property, including the lack of patents, copyrights, and trademarks or the misuse of intellectual property can become a problematic trade barrier for companies. There can be a variety of reasons that this can happen.

Service Barriers. Service barriers can arise in a variety of ways when conducting business internationally. Some barriers might include receiving a limited amount of assistance from foreign financial institutions and experiencing difficulty meeting quotas.

Anticompetitive Practices: Anticompetitive practices are events that may inhibit the ability of a company to do business with another business or within another nation. An example of this issue could be trying to sell goods in a foreign country, but because of the government or a group of firms in that country that are using business practices you do not, or can not use.

Other barriers: Other barriers may include a combination of the above categories.