1 Trade Barriers Ing. Mansoor Maitah Ph.D. et Ph.D.
2 Economic Basis for Trade Distribution of Economic Resources Different Technologies Goods are Differentiated as to Quality and other Non - price Attributes Labor-Intensive Goods Land-Intensive Goods Capital-Intensive Goods
3 Trade Barriers What is a Trade Barrier Import duties Import quotas Import licenses Tariffs Export licenses Subsidies Non-tariff barriers to trade Voluntary Export Restraints
4 Trade Restrictions Arguments for Trade Restrictions National Defense Certain industries need protection Imports may not be available during wartime. Domestic production essential to provide war materials. Prevent valuable technologies from being used to strengthen competition, especially militarily National Security Is threatened by trade. Sanctions to Punish Offending Nations Inflict economic damage to encourage, to modify behavior Protect Infant or Dying Industry In the long run will have a comparative advantage Special Industries with Unique and Substantial Economic Potential will not mature without Protection from Trade.
5 Trade Restrictions Arguments for Trade Restrictions - Jobs are destroyed by trade. Protect Domestic Jobs from Cheap Foreign Labor. - Worker wages are hurt by Trade. Greatest problem for low-skilled workers. - Infant Industry Argument: Special Industries with Unique and Substantial Economic Potential will not mature without Protection from trade.the contention that tariffs should be imposed to protect from import competition an industry that is trying to get started. After the industry becomes technologically efficient, the tariff can be lifted. -Unfair competition undermines the Benefits of Trade. Fair competition brings cost of imported goods up to domestically produced goods to prevent unfair advantage
6 Trade Restrictions Protection to Reduce Trade Deficit Deficits due to Macroeconomic imbalance national saving < national investment. Direct effect of protection is lower imports, but also appreciates currency exports fall, imports rise no reduction in trade deficit! Protection as Bargaining Device Trade barriers as bargaining chip in trade negotiations. Gains from unilateral liberalization More threats, but how much trade liberalization?
7 Trade Restrictions Retaliation Import restrictions placed by another country may result in similar restrictions by domestic government. (EU ban on hormone treated U.S. beef).
8 What is Dumping? Normal Value in the Exporting Market Export Price If a product is exported at a price (Export Price) lower than the price (Normal Value) it normally charges on its own home market, it constitutes dumping
9 Reasons for Retaliation Dumping is the selling of a product abroad for less than The average cost of production in the exporting nation The market price in the exporting nation The price to third countries Result of Excess production Cyclical or seasonal factors Attempt to force domestic producers out of business
10 The Impact of dumping Loss of Sales Reduced Profits Loss of market share Reduced returns on investments Decline in output Under utilization of capacity Adverse Effect On Cash flow Inventories Employment Wages Growth New Investment Ability to raise capital
11 Sanctions Justified Dumping for which sanctions are considered justified Social dumping Lower labor costs and poorer working conditions Environmental dumping Lax environmental standards Financial services dumping Low requirements for bank capital/asset ratios Cultural dumping Cultural barriers aid local firms Tax dumping Differences in corporate tax rates or special breaks
12 Other Reasons for Retaliation Subsidies Government provides to domestic firm to encourage exports or protect from imports Can be Cash payment Government participation in ownership Low-cost loans Preferential tax treatment Countervailing Duties Set by importing nation to offset effects of subsidy Equal to the subsidy amount
13 Types of Restrictions - Tariffs Ad Valorem Percentage of invoice value Specific Fixed sum of money per unit Compound duty Combination of the above
14 Types of Restrictions - Tariffs Official Prices Minimum import duty regardless of invoice price Variable Levy Calculated daily based on world market price Lower Duties for Local Input Encourages some local production
15 Types of Restrictions - Nontariff Quantitative Quotas Voluntary Export Restraints Orderly Marketing Arrangements Nonquantitative Nontariff Direct government participation in trade Customs and other administrative procedures Government and private standards
16 Quota System A government-imposed restriction on the quantity of a specific good that another country is allowed to sell in the Czech Republic In other words, quotas are restrictions on imports, usually applied to one or several specific countries.
17 Quotas Quota is a set maximum on imports in volume or value terms. Similarities to tariff that results in same level of imports: increase domestic sale price and production; reduce consumption. transfer from consumer to producer. Quotas do not generate any tariff revenue! quota rent domestic sale price in excess of cost of imports. Quota rent is pure profit. Quotas likely welfare inferior to tariff due to lost quota rent. wasted in costly lobbying for quota licenses. given to foreign governments.
18 Equilibrium with restrictions Equilibrium without restrictions
19 Quotas additional considerations Suppose domestic demand increases: tariff: imports increase, no change in price. quota: domestic price increases, no change in imports Quotas reduce price competition. foreign firms cannot increase sales by lowering price, so don t compete on basis of price domestic firms end up with more market power. reduced economies of scale Quotas and/or VERs common in textiles, iron/steel, autos, agriculture
20 Voluntary quotas Voluntary Restraint Agreement (VRA) An official agreement with another country that voluntarily restricts the quantity of its exports. Rents definitely go to foreigners. More politically reasons than formal barriers to trade. Voluntary Import Expansion (VIE) An official agreement with another country in which it agrees to import more from the Czech Republic.
21 Ways to Restrict Foreign Trade Tariffs Tax on imported goods Benefits import-competing industries Harms consumers by raising prices Tariff Revenue Decline in Imports Increased Domestic Production Increased Domestic Production
22 Other Barriers to Trade, cont Government Procurement Policies Administrative Classification Health and Safety Standards Social Policies Performance Requirements (typically applying to foreign direct investment)
23 Levels of Economic Development Developed Classification for all industrialized nations, which are mostly technologically developed. Developing Classification for world s lower income nations, which are less technically developed. Newly Industrialzing Countries (NICs) Fast-growing, middle-income or higher economies Heavy concentration of foreign investment Exported large quantities of manufactured goods, including high-tech products
24 Levels of Economic Development Newly Industrialized Economies (NIEs). Primarily used to refer to the four tigers Taiwan, Hong Kong, Singapore, South Korea IMF combines NIEs with Industrialized Nations to form advanced economies Emerging Market Economies Chile, Malaysia, China, Thailand, Indonesia Transition Countries or Eastern Europe Former communist countries
25 Anti-Dumping and Countervailing Duties Anti-Dumping and Countervailing Duties in response to foreign firms unfairly selling goods in the U.S. at less than fair value. Countervailing duty meant to offset foreign subsidies. Dumping: 1) selling in U.S. at price lower than in home market, or 2) at price below cost. system biased in favor of finding of unfair pricing Restrictions on Services aircraft landing rights; sea transport restrictions; insurance Domestic Content Provisions particularly important in Preferential Trade Areas, e.g., NAFTA
26 Current Trade Sanctions Burma (Myanmar) Cuba Diamond Trading Iran Iraq Liberia Libya Nonproliferation North Korea Sudan Syria Zimbabwe
27 Regional Trade Bloc A group of nations that grants members special privileges. Examples include the European Union, NAFTA, and the Association of Southeast Asian Nations. Preferential Trade Areas
28 Levels of Regional Integration Political Union Economic Union Common Market Customs Union Free-Trade Area Coordinate aspects of members economic and political systems Remove barriers to trade, labor, and capital; set a common trade policy against nonmembers; and coordinate members economic policies Remove all barriers to trade, labor, and capital among members; and set a common trade policy against nonmembers Remove all barriers to trade among members, and set a common trade policy against nonmembers Remove all barriers to trade among members, but each country has own policies for nonmembers
29 Regional Economic Integration
30 Previous enlargements 1951 ECSC (European Coal and Steel Community): France,Italy, Germany, Belgium, The Netherlands, Luxembourg 1973: Denmark, Ireland, and UK 1981: Greece 1986: Spain and Portugal 1995: Austria, Finland and Sweden 2004: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia Romania and Bulgaria
31 The European Union on the map New Member States (2007) Bulgaria, Romania Candidate Countries Croatia; (Former Yugoslav Republic of Macedonia) - Negotiations not yet started; Turkey Potential Candidate Countries Albania, Bosnia and Herzegovina, Montenegro, Serbia
32 International Trade Organizations General Agreement on Tariffs and Trade (GATT) An international agreement established in 1947 to further world trade by reducing barriers and tariffs. Several Rounds of Liberalization. first few on tariff reductions, admitting new members; many quotas eliminated. GATT was replaced by the World Trade Organization in 1995.
33 International Trade Organizations World Trade Organization (WTO) Reductions in Tariffs Worldwide - Trade Liberalization New Rules to Promote Trade in Services Reduction in Agricultural Subsidies Intellectual Property Protections Phasing Out Textile Quotas and Tariffs Principles of the Multilateral Trading System (Applies to Goods) Non-Discrimination Treat members no worse than any other member. National Treatment: treat imports no worse than domestic goods once inside border. Reciprocity Mutual, reciprocal, equivalent trade concessions. Negotiated reductions in trade barriers. Limits free riding; overcomes Protectionist Bias.
34 International Trade Blocs International Trade Blocs
35 The cost of protecting The cost of protecting U.S. jobs Restrictions on textiles and apparel goods cost U.S. consumers $9 billion a year. Cost $50,000 a year for each $20,000 job saved Restriction on imports of Japanese cars Cost $160,000 per year for each job saved in the auto industry
36 The cost of protecting The cost of protecting U.S. jobs Glass industry restrictions Cost $200,000 per year per job saved Steel industry restrictions Cost $750,000 per year per job saved
Trade Blocs How have trade agreements affected world trade? For the global economy to fully benefit from trade, there has to be a liberal (free) trade system. Each country can produce what it has a comparative
92/2015-27 May 2015 Energy prices in the EU Household electricity prices in the EU rose by 2.9% in 2014 Gas prices up by 2.0% in the EU In the European Union (EU), household electricity prices 1 rose by
Unit 1 Chapter 5 5 The United States and the Global Economy Chapter Objectives Key Facts About U.S. International Trade Comparative Advantage, Specialization, and International Trade How Exchange Rates
International Trade, Comparative Advantage, and Protectionism Chapter 20 Trade Surpluses and Deficits A trade surplus exists when a country exports more than it imports. A trade deficit exists when a country
Import Quotas Both tariffs and import quotas reduce quantity of imports, raise domestic price of good, decrease welfare of domestic consumers, increase welfare of domestic producers and cause deadweight
Accumulative Turnover Figures for All FCI Members Compared to Worldwide Factoring Turnover (in Millions of EUR and USD) EUR EUR EUR EUR EUR EUR EUR INCREASE 2006 2007 2008 2009 2010 2011 2012 2011/2012
World 5 The the Global Economy 5-1 Chapter Objectives World Key Facts About U.S..,,. How Rates are Determined in Currency s. How Why Sometimes Interferes with Free. Role Played by Free- Zones the WTO in
Chapter 8 The Instruments of Trade Policy Preview Partial equilibrium analysis of tariffs: supply, demand and trade in a single industry Costs and benefits of tariffs Export subsidies Import quotas Voluntary
Employment by Economic Activity Short Term Indicators of the Labour Market Employment Trends through 2nd Quarter 2013 Department of Statistics Contents Methodological Note 2 Summary of Employment Trends
Tariffs: import tax Specific tariffs Taxes that are levied as a fixed charge for each unit of goods imported Example: A specific tariff of 10 on each imported bicycle with an international price of 100
The Changing Regulatory Mosaic of the Temporary Staffing Industry in Europe Dr Jennifer Ferreira Outline Temporary Agency Work in Europe National Varieties of Temporary Staffing Industry Temporary Agency
Free Printable Maps for Geography Education Map with region names shown Map without names, for coloring or quizzes Map with coordinate system, for location practice Answer key for coordinate system quiz
Chapter 8 The Instruments of Trade Policy Slides prepared by Thomas Bishop Copyright 2009 Pearson Addison-Wesley. All rights reserved. Preview Partial equilibrium analysis of tariffs: supply, demand, and
Symposium on Japan s Economic Partnership Agreements Mexico-Japan EPA Success Story Raúl l Urteaga Minister Office of Mexico-Japan Economic Partnership Agreement Embassy of Mexico Tokyo February 2009 Mexico
BULGARIAN TOURISM IN FACTS AND FIGURES (JANUARY DECEMBER 2013) 5.5 % more foreign tourists for the period January December 2013. 6.3 % more foreign tourists for leisure and recreation for the year 2013.
Skyscrapers around Tokyo Bay at night. With oil consumption almost entirely dependent on imports, the Japanese government is working hard to improve energy security by using more natural gas, nuclear power,
U.S. Trade Overview, 213 Stephanie Han & Natalie Soroka Trade and Economic Analysis Industry and Analysis Department of Commerce International Trade Administration October 214 Trade: A Vital Part of the
COST Presentation COST Office Brussels, 2013 COST is supported by the EU Framework Programme ESF provides the COST Office through a European Commission contract What is COST? COST is the oldest and widest
How and Why Do Countries Regulate Trade? (HA) Have you ever tried to mail a package to another country at the post office? If so, you probably had to fill out a customs declaration. It asked you to list
P ($) TM 9-1 Figure 9-1 Partial Equilibrium Effects of an Import Quota 5 S 4 3 2.5 2 G G J J E H H K 1 A C M N B D D 0 10 20 25 30 40 50 55 60 65 70 TM 9-2 Table 9-1 Voluntary Export Restraint Arrangements
Chapter 20 INTERNATIONAL TRADE INTRODUCTION This chapter addresses some basic issues related to trade: What benefit, if any, do we get from international trade? How much harm do imports cause, and to whom?
International Call Services Affordable rates for business calls. Wherever you are in the world. We ve got plenty to say when it comes to staying in touch when you re overseas. We have agreements with 443
International Business, Ch8, S12, 38Q 38P MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following is a method used by some manufacturers
All prices are in Euro, excl. VAT Europe Central Europe Asia and Middle East Africa North America Central America South America Oceania d Europe Extra Compact report Identification Austria 60,87 2,48 Belgium
International Trade CHAPTER18 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Describe the patterns and trends in international trade. 2 Explain
25/2015-9 February 2015 Energy production and consumption in 2013 Energy consumption in the EU down to its early 1990s level EU energy dependence at 53% In 2013, gross inland energy consumption 1, which
Review Question - Chapter 7 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) International trade arises from A) the advantage of execution. B) absolute
PENSIONS PROFILE DECEMBER 2011 TRANSFERS FROM AN OVERSEAS PENSION SCHEME = Summary A simplified guide to the process: 1. Individual requests transfer from their overseas pension scheme to their UK registered
INFORMATION SHEET No. 126 Malta in International Tax Structuring February 2015 Introduction Malta is a reputable EU business and financial centre with an attractive tax regime and sound legislative framework.
Brochure More information from http://www.researchandmarkets.com/reports/3254268/ World Textile and Apparel Trade and Production Trends: The EU, 2015 Description: This 2015 edition of our flagship series
INTERNATIONAL TRADE 22 CHAPTER Silk Routes and Sucking Sounds Since ancient times, people have expanded trading as far as technology allowed Marco Polo s silk route between Europe and China is an example.
Regional Forest Information Week 33rd Joint FAO/UNECE Working Party on Forest Economics and Statistics Palais des Nations, Geneva, 23 24 March 2011 Elisa Asmelash Overview The scope of this study is to
Facts: Population Facts: Population 6 big nations: > 35 million (Germany, the UK, France, Italy, Spain and Poland). Netherlands: 16 million people. 8 small nations (size of a big city): 8 to 11 million:
MONTENEGRO STATISTICAL OFFICE R E L E A S E No: 88 Podgorica, 9 April 015 When using the data, please name the source Quarterly Gross Domestic Product of Montenegro for 014 The release presents the preliminary
International Recruitment vs. National Recruitment Rolf Heeb AIMS International CONTENT 1. Introduction 2. Definitions 3. Considerations in International Recruitment 4. Global Executive Search Firms 5.
ERASMUS+ MASTER LOANS Erasmus+ Master Loan: opening up access to more affordable lending for cross-border studies The Erasmus+ programme makes it possible for students who want to take a full Masters level
Asylum Trends Monthly Report on Asylum Applications in The Netherlands and Europe August 2014 First asylum applications in the Netherlands Source: INDiGO Top-10 last twelve months first asylum applications
Alcohol Consumption in Ireland 1986-2006 Report for the Health Service Executive Alcohol Implementation Group Prepared by Dr. Ann Hope This report should be quoted: Hope, A. (2007). Alcohol consumption
The European Patent Office An introduction to the EPO and the European patent system Christian Soltmann 5.4.2 Patent Information Promotion November 2014 Contents About the European Patent Office Granting
Order Code RL30608 EU-U.S. Economic Ties: Framework, Scope, and Magnitude Updated June 12, 2008 William H. Cooper Specialist in International Trade and Finance Foreign Affairs, Defense, and Trade Division
Total (Transfer Consolidated cross-border claims in all currencies and local claims in non-local currencies Up to and including one year Maturities Over one year up to two years Over two years Public Sector
2016 and the European Union Fra and the European Union The 2016er edition of the flyer and the European Union shows again: is one of the strongest regions in Europe. In a European comparison is included
Ireland Irish holding companies A popular choice Introduction Ireland has long been a jurisdiction of choice for the establishment of holding companies. There are a number of reasons for Ireland's popularity.
Bankruptcy Systems and In-court Reorganisation of Firms, 2010 Content: 1. Perception of the Bancruptcy System... 2 2. Perception of In-court Reorganisation... 4 3. Perception of Creditor Committees, Fast
Assignment 5 (Chapter 5) 1. The imposition of a tariff on imported steel for the home country results in: a) Improving terms of trade and rising volume of trade b) Higher steel prices and falling steel
Current Affairs European Union (EU) The CSS Point www.css.theazkp.com www.facebook.com/thecsspoint Introduction European Union is an organization of 25 countries of Europe. EU came into operation in 1993
Chapter 9 The Instruments of Trade Policy Preview Partial equilibrium analysis of tariffs in a single industry: supply, demand, and trade Costs and benefits of tariffs Export subsidies Import quotas Voluntary
U.S. Embargoed/Sanctioned Countries 2014 Countries to which travel may be restricted, in addition to imports, exports and financial transactions: Cuba* Iran North Korea Sudan Countries to which imports,
Facts about German foreign trade in 2012* Foreign trade figures in 2012 Exports Imports Net foreign demand Total Goods Services Total Goods Services Total memorandum items billion EUR In relation to EU
PORTABILITY OF SOCIAL SECURITY AND HEALTH CARE BENEFITS IN ITALY Johanna Avato Human Development Network Social Protection and Labor The World Bank Background study March 2008 The Italian Social Security
This fact sheet presents the latest UIS S&T data available as of July 2011. A snapshot of R&D expenditure GLOBAL INVESTMENTS IN R&D UIS Fact Sheet, August 2011, No. 15 The most commonly used indicators
Setting up in Denmark 6. Taxation The Danish tax system for individuals rests on the global taxation principle. The principle holds that the income of individuals with full tax liability is taxed in Denmark
Chapter 9 The Instruments of Trade Policy Preview Partial equilibrium analysis of tariffs in a single industry: supply, demand, and trade Costs and benefits of tariffs Export subsidies Import quotas Voluntary
IMMIGRATION TO AND EMIGRATION FROM GERMANY IN THE LAST FEW YEARS Bernd Geiss* Germany, Destination for Migrants Germany is in the middle of Europe and has common borders with nine countries. Therefore,
International Economics, 8e (Krugman) Chapter 8 The Instruments of Trade Policy 8.1 Basic Tariff Analysis 1) Specific tariffs are A) import taxes stated in specific legal statutes. B) import taxes calculated
187/2014-5 December 2014 This News Release has been revised following an error in the data for Gross Fixed Capital Formation. This affects both the growth of GFCF and its contribution to GDP growth. All
GfK Market Insight, Philippines An Overview and Key Highlights of the Consumer Technology Market February 2013 GfK 2012 GfK Market Insight, Philippines February 2013 1 We are GfK GfK 2012 GfK Market Insight,
Mail Services Services Holiday Mailing Schedule Expedited - Newark, NJ 1 Expedited - Elk Grove Village, IL 2 Expedited - Corona, CA 3 Priority 4 Standard 4 Priority Mail 5 Economy Mail 5 1 Expedited Newark,
Slovakia Country Profile EU Tax Centre July 2015 Key tax factors for efficient cross-border business and investment involving Slovakia EU Member State Yes Double Tax Treaties With: Australia Austria Belarus
S&P Capital IQ ranks stocks in accordance with the following ranking methodologies: STARS Stock Reports: S&P Capital IQ s qualitative STARS recommendations are determined and assigned by S&P Capital IQ
What is the European Union? A unique economic and political partnership between 27 democratic European countries. What are its aims? Peace, prosperity and freedom for its 495 million citizens in a fairer,
Croatia Country Profile EU Tax Centre July 2016 Key tax factors for efficient cross-border business and investment involving Croatia EU Member State Double Tax With: Treaties Albania Armenia Austria Azerbaijan
Chapter 9 Nontariff Barriers and the New Protectionism Nontariff barriers to trade (NTBS) are now perhaps as much as ten times more restrictive of international trade than tariffs. Walters and Blake, The
University of Lethbridge Department of Economics ECON 1012 Introduction to Macroeconomics Instructor: Michael G. Lanyi CH 31 1) Goods and services that we buy from other countries are our A) balance of
Austria Country Profile EU Tax Centre July 2015 Key tax factors for efficient cross-border business and investment involving Austria EU Member State Yes Double Tax Treaties With: Albania Algeria Armenia
FANCY STUDYING ABROAD? OPPORTUNITIES @UNIBO Francesca Valente International Relations Area University of Bologna ERASMUS + The Erasmus+ Programme is an EU funded mobility programme allowing you to spend
TRIPS OF BULGARIAN RESIDENTS ABROAD AND ARRIVALS OF VISITORS FROM ABROAD TO BULGARIA IN OCTOBER 2016 In October 2016, the number of the trips of Bulgarian residents abroad was 404.0 thousand (Annex, Table
Last updated: 4 September 2015 Reporting practices for domestic and total debt securities While the BIS debt securities statistics are in principle harmonised with the recommendations in the Handbook on
Global Competitiveness Report 2015-2016 Caroline Galvan Vilnius, 01.12.2015 World Economic Forum Our Conversation Today 01 Methodology 02 Global Ranking and Key Messages 03 Performance of the EU with a
2015/16 FOREWORD A country's tax regime is always a key factor for any business considering moving into new markets. What is the corporate tax rate? Are there any incentives for overseas businesses? Are
Turan Atilgan, Seher Kanat Ege University, Department of Textile Engineeering 35100 Bornova, Izmir, Turkey E-mail: email@example.com firstname.lastname@example.org The Effects of the EU Customs Union with
UK Poultry Exports UK OVERVIEW: The overall volume of UK exports of poultry to third countries fell 11.4% in compared with. In terms of value this only equated to a drop of around 0.03%. However, looking
TaxInformation Austria 2014 International Assignment Services Income tax, social security and immigration in brief January 2014 Income tax rate The tax assessment base equals the sum of income minus income-related
9. Evaluating new production and sourcing locations Labor costs in manufacturing industries in different countries Norway Belgium Switzerland West. Germany Denmark Finland France Austria Luxemburg Sweden
6 Macroeconomics LESSON 2 Government Intervention in International Trade Introduction and Description The last lesson demonstrated the benefits of trade among nations, showing that total output increased.
Information sheet for Lead Partners and project partners on the Exceptions to the rules on nationality and origin According to Article 19 para (6) of the Council Regulation (EC) No 1085/2006 of 17 July
Now there s a simpler way of looking at the world Simple international pricing across 6 world zones Working out how much it costs to call from your mobile, whenever you are calling from outside the UK,
MALTA TRADING COMPANIES Malta Trading Companies Maltese Registered Companies and Trading Operations in Malta Malta, an EU Member State since May 2004, has developed into a leading and reputable financial