Non Tariff Barriers

What are Non-Tariff Barriers?
Non-tariff barriers are trade barriers that restrict the import or export
of goods through means other than tariffs. The World Trade
Organization (WTO) identifies various non-tariff barriers to trade,
including import licensing, pre-shipment inspections, rules of origin,
custom delayers, and other mechanisms that prevent or restrict trade.
Developed countries use non-tariff barriers as an economic strategy to

control the level of trade they conduct with other countries. When
making decisions on the non-tariff barriers to implement in
international trade, countries base the barriers on the availability of
goods and services for import and export, as well as the existing
political alliances with other trade partners.
Developed countries may elect to release other countries from being

subjected to additional taxes on imported or exported goods, and
instead create other non-tariff barriers with a different monetary effect.
Summary
 Non-tariff barriers refer to any measures, other than

customs tariffs, that regulate imports or exports into a
country.
 Industrialized countries use non-tariff barriers to protect
local industries against foreign competition.
 Common examples of non-tariff barriers include licenses,
quotas, embargoes, foreign exchange restrictions, and
import deposits.
Origin of Non-Tariff Barriers
During the formation of nation-states, countries had to devise ways of

raising money to finance local projects and pay recurrent expenditures.
One of these ways was the introduction of tariffs, which placed
restrictions on imported and exported goods and services.
However, industrialized countries transitioned from tariff barriers to

non-tariff barriers since they had built other sources of funding. Most
developing nations still rely on tariff barriers as a way of raising
revenues to finance national projects while regulating international
trade with other countries.
Later, the industrialized countries switched from tariff to non-tariff

barriers for several reasons. One reason was to regulate international
trade, even in the absence of tariff barriers. It exempts certain
countries from paying additional taxes on goods, and instead, created
other meaningful non-traffic barriers.
A second reason for introducing non-tariff barriers is to support weak

industries that have been affected by the reduction or withdrawal of
tariff barriers. A final reason is that non-tariff barriers are an avenue for
interest groups to influence trade regulation in the absence of trade
tariffs.
Types of Non-Tariff Barriers
Non-tariff barriers may take the following forms:

1. Protectionist barriers
Protectionist barriers are designed to protect certain sectors of

domestic industries at the expense of other countries. The restrictions
make it difficult for other countries to compete favorably with locally
produced goods and services. The barriers may take the form of
licensing requirements, allocation of quotas, antidumping duties,
import deposits, etc.
2. Assistive policies
Although assistive policies are designed to protect domestic companies

and enterprises, they do not directly restrict trade with other countries,
but they implement actions that can impede free trade with other
countries. Examples of assistive barriers include custom procedures,
packaging and labeling requirements, technical standards and norms,
sanitary standards, etc.
International companies must meet the requirements before they can

be allowed to export or import certain goods into the market. The
governments also help domestic companies by providing subsidies and
bailouts so that they can be competitive in the domestic and
international markets.
3. Non-protectionist policies
Non-protectionist policies are not designed to directly restrict the

import or export of goods and services, but the overall outcomes may
lead to free trade restrictions. The policies are primarily designed to
protect the health and safety of people and animals while maintaining
the integrity of the environment.
Examples of non-protectionist policies include licensing, packaging and

labeling requirements, plant and animal inspections, import bans for
specific fishing or harvesting methods, sanitary rules, etc.

Examples of Non-Tariff Barriers
1. Licenses
Licenses are one of the most common instruments that countries use
to regulate the importation of goods. A license system allows
authorized companies to import specific commodities that are included
in the list of licensed goods.
Product licenses can either be a general license or a one-time license.

The general license allows importation and exportation of permitted
goods for a specified period. The one-time license allows a specific
product importer to import a specified quantity of the product, and it
specifies the cost, country of origin, and the customs point through
which the importation will be carried out.
2. Quotas
Quotas are quantitative restrictions that are imposed on imports and

exports of a specific product for a specified period. Countries use
quotas as direct forms of administrative regulation of foreign trade,
and it narrows down the range of countries where firms can trade
certain commodities. It caps the number of goods that can be imported
or exported at any given time.
3. Embargoes
Embargoes are total bans of trade on specific commodities and may be

imposed on imports or exports of specific goods that are supplied to or
from specific countries. They are considered legal barriers to trade, and
governments may implement such measures to achieve specific
economic and political goals.

4. Import deposit
Import deposit is a form of foreign trade regulation that requires

importers to pay the central bank of the country a specified sum of
money for a definite period. The amount paid should be equal to the
cost of imported goods.

Non Tariff Barriers

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What are Non-Tariff Barriers?

Developed countries use non-tariff barriers as an economic strategy to

Developed countries may elect to release other countries from being

 Non-tariff barriers refer to any measures, other than

Origin of Non-Tariff Barriers

During the formation of nation-states, countries had to devise ways of

However, industrialized countries transitioned from tariff barriers to

Later, the industrialized countries switched from tariff to non-tariff

A second reason for introducing non-tariff barriers is to support weak

Types of Non-Tariff Barriers

Non-tariff barriers may take the following forms:

Protectionist barriers are designed to protect certain sectors of

Although assistive policies are designed to protect domestic companies

International companies must meet the requirements before they can

Non-protectionist policies are not designed to directly restrict the

Examples of non-protectionist policies include licensing, packaging and

Examples of Non-Tariff Barriers

Product licenses can either be a general license or a one-time license.

Quotas are quantitative restrictions that are imposed on imports and

Embargoes are total bans of trade on specific commodities and may be

Import deposit is a form of foreign trade regulation that requires

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