Non-Tariff Trade Barriers

1
Non-Tariff Trade Barriers

• Discriminatory measures used by governments to
  keep imports out without using tariffs

2
Non-Tariff Trade Barriers

• Import Quotas
• Voluntary Export Restraints
• Health and Safety Standards
• Government Procurements
• Domestic Content Requirements
• Intellectual Property Rights
• Export Subsidies

3
Why Import Quotas?

• For the following reasons governments choose
  import quotas
• As insurance against further increases in import
  spending . to improve balance of payments and
• To gain government officials greater
  administrative flexibility and power

4
Welfare Effects of Import Quotas

• Monopoly is Not Created
• Consumers lose
• Producers gain
• Importers gain quota rents and
• Net National Loss of Welfare Deadweight loss of
  trade restrictions

• Monopoly is Created
• Consumers lose
• Producers gain
• Importers gain quota rents and
• Net National Loss of Welfare Deadweight loss of
  trade restrictions Deadweight loss of monopoly