NONTARIFF BARRIERS NTB

1
NON-TARIFF BARRIERS (NTB)

• -This far we have dealt with "visible" trade
  barriers, i.e. tariffs at boarders
• -There are though other ways that a country can
  protect domestic production.

2
The SEM

• Estimation of the economic effects of the
  creation of the Internal Marker
• The 1992 programme
• Removal of NTBs gt
• efficiency gains
• economies of scale

3
Why protect?

• A) infant industry argument
• B) infant government argument
• C) national security argument
• D) diversification argument
• E) other arguments e.g. environmental protection,
  political arguments, balance of payments,
  theoretical arguments and antidumping arguments

4
Also notice that there is NATURAL TRADE
BARRIERS

• -e.g. transportation costs
• -Treaty of Rome (articles 74-84) obligate member
  countries to formulate a common transportation
  policy
• -During the 1960s and 1970s the numbers of
  non-tariff barriers to trade increased, despite
  the wording in the Treaty of Rome (article 7),
  which prohibits different treatment based on
  nationality
• -A "useful" part of the Treat of Rome (article
  36) provides for the possibility of establishing
  trade barriers for reasons of public order,
  security and protection of life and health

5
Examples of non-tariff barriers

• 1. Physical barriers
• -customs procedures at frontiers
• 2. Technical barriers
• -product regulation
• -discriminatory public action
• -restriction to foreign employees
• -property and business rights
• -capital mobility restrictions
• 3.Fiscal barriers
• -Different indirect national taxes
• -Value added tax (VAT) harmonization

6
The increased number of NTB leads to the
introduction of a "white paper" in 1985

• -The white paper on the completion of the
  INTERNAL MARKET contained about 300 different
  proposals for EC directives, which would be
  realized before the end of 1992.
• -In 1986 an amendment was made to the Treaty of
  Rome, when the SINGLE EUROPEAN ACT was adopted
• -Also recall CASSIS DE DIJON

7
WELFARE EFFECTS RESULTING FROM THE INTERNAL
MARKET

• You could look at the static cases of welfare
  effects resulting from an internal market
• However, you dont
• A new way of analysing e.g. the Cecchini report
  í.e. by asking the industry what they think ,,

8
Enlargement of EU

• The case of the enlargement 1995
• How do we estimate the effects?
• Finlands participation in EU ETLA (1993) Costs
  and benefits of EC Membership
• gt Net economic benefit 4,2 for Finland
• Where does this benefit come from?

9
What is going on now?

• The white paper from 1993
• Making the most of the Internal market
• SME support
• Social dialogue (two sides of industry)
• Infrastructure (TEN)
• Preparing the information society
• RD, life long learning
• Lisbon process
• EMU and Euro
• Enlargement 2004 the big bang 10 new, 2007
  Bulgaria Romania