Essay on Nontariff Trade Barriers

Clarke (2007) states the main reasons for subsidies is to ensure a stable income of farmers, to buffer them from the impact of external factors that could ruin their harvest, which is done in the form of a guaranteed minimum price, also known as price ceiling. Moreover, Clarke (2007) claims that food security plays also an important part, since this signifies the self-sufficiency of a nation in certain products, regardless of its comparative advantage in producing those food items. Generally, a comparative advantage is “the ability to produce goods or services at a lower opportunity cost than others”. (Investopedia, 2003) Disregarding the fact that other nations have lower opportunity costs in cultivating for example of grain, countries will cultivate some sort of grain themselves in order to have a lower dependency on imports of other nations. The last reason that Clarke observes is that subsidies are used to protect prices to the consumer. However, it can be said that the government protects the economy as a whole with subsidies. As a price lower than the actual market price faces a higher demand than vice versa. Furthermore, it enables heavily subsidized nations to enter and sell their goods to other countries. This influences the world market and has an impact on

subsidies; which are grants of money that are given to the Canadian agricultural markets and

Farm subsidies help farmers to keep the prices of their products low and competitive in the international market. This means that national farmers and their products receive sufficient support and revenue to keep them in business. If this were not the case, there is a danger that retailers will begin to find foreign markets from which to important even basic foods such as corn and meat. The danger here is then that many American

International trade barriers are restrictions put in place by the government to prevent the inflow of international goods and services to the country. These restrictions are placed by the government officials with the intent of protecting their economy from the international competition; they include tariff and nontariff barriers. Some of the argument for trade restrictions includes the following; It serves as a national defense from competitions to foreign companies, it serves as a means to protect infant industry from imports until they have enough capital to invest, it serves as a means to protect domestic jobs from cheap foreign labor, It also serves as a means to permit diversification of the domestic economy and a way to improve balance of trade (Ball, Geringer, Mcnett &Minor, 2012). Barriers to trade exist in developed and underdeveloped countries; some of these countries include China, United States, Japan, Russia, India, Latin America, European and African countries. Upon examining the barriers to trade which exists in different continents of the world, specifically comparing the barriers in developed countries to underdeveloped countries, there tends to be some similarities as well as differences. A closer look at countries such as China and Nigeria denotes a clear picture of what would be considered a developed and underdeveloped country. By reviewing the barriers that exists in both countries, similarities and

As a result, of rising opportunity costs, domestic production may stop short of complete specialization. However, if a large group of people and nations are benefiting from specialization and in international exchange, the government has the power to restrict the free flow of imports or encourage exports. Government can interfere with free trade by protective tariffs, import quotas, nontariff barriers, and export subsidies. Protective tariffs are tariffs that are enacted with the aim of protecting a domestic industry. Import tariffs limits on the quantities or total value of specific items that may be imported. Nontariff barriers is a form of restrictive trade where barriers to trade are set up and take a form other than a tariff. While export subsidies is a government policy to encourage export of goods and discourage sale of goods on the domestic market through direct payments, low-cost loans, tax relief for exporters, or government-financed international advertising. In executing barriers against imports, the nations whose exports suffer may retaliate with trade barriers of their own, creating a trade

In chapter eight, one main idea concept is subsidy. Subsidies are an amount of money given to a business, usually from the government, in order to keep the price of service low. A real life example of a subsidy is likely to occur in the farming industry. The farming industry is very competitive in addition to low priced products. Therefore, the government would provide subsidies to a farm so it can sell their products cheaper, yet still make a profit. I do not think subsidies are a necessity, but I can see how they can benefit poorer areas who are able to afford products at the lowest market price. (177-180)

First, one of the restrictions to free trade is tariff. According to Menlo-Atherton High School (2015), a tax that is put on imported goods from abroad is known as tariff. Tariff is used to raise the price of imported goods so that the domestic producers can sell their similar goods at higher prices. Domestic government will be the one collecting the money that is received from tariff. Protective tariffs and revenue tariffs are the types of tariff. Protective tariffs are put on imported goods so that it will be more expensive. It is used to protect the domestic industries from the competition of foreign firms. Revenue tariffs are used to raise money for government (Menlo-Atherton High School, 2015). The benefit of tariffs are uneven due to tariff is a tax. Besides that government is benefited, domestic industries are benefit from it as well due to the reduction of competition from foreign productions. It is because of the increased prices of the imported products. However, it is unfortunate for the consumers because the higher price of goods is due to higher import price. Tariff tends to bring advantages for government and producers but not to the

These subsidies can be used in multiple manners, but often can find its use through the purchasing of new equipment. Technology plays a big role in the ability for production to increase. As farms remain capable of using new technologies to foster better yields, then the production possibility curve will continue to be altered.

quotas, and other trade barriers among the United States, Canada, and Mexico. North Carolina is

What are subsidies? A subsidy is a government payment or tax credit provided to either the producers or consumers of certain goods. Subsidies are a prime example of cronyism. One very popular subsidy controversy is the sugar subsidies. The existent Sugar Program of the U.S. was introduced in 1934, with the goal of lowering sugar production and raising the price. This system only benefits the sugar industry at cost of American consumers and the taxpayers. Unsurprisingly, the Sugar Program has advanced into a cover of government imposed price supports, import quotas, and tariffs that keep domestic prices way too high. These policies are costing taxpayers and consumers billions of dollars while fostering the perfect climate for cronyism. During

Competition from foreign producers affects American consumers in a number of ways. They affect the way we, as Americans, pay taxes, the way we trade with other countries and the limitations of that trade. These trade barriers protect us in order to keep specific industries of the United States safe and to protect parts of our economy. Trade barriers include tariffs, quotas, and subsidies and are a part of our economy because they are necessary for the success of our country.

Government subsidies are the benefits provided by the government of the country to specific products, businesses, or individuals in form of cash or the reduction of tax in order to back those products, enterprises, or people. There are usually static and gynamic effects of government subsidies. If to speak about the government subsidies in the United States, the biggest amount of them are given to energy companies that invest in US evergy facilities. These are companies that operate in the following areas: fossil fuels, renewable energy, nuclear energy, and energy efficiency.

to that general free-trade thrust. In addition to the costs they impose on the U.S.

One problem that trade barriers have caused is that they increase the cost of enterprises, affecting the international competitiveness of enterprises. For a long time, due to the low technological content of Chinese export products, mainly to win international markets at low prices, the developed countries have adopted some ways, such as the green subsidy system, the green packaging system, the green fortress and so on. By imposing import surcharges, increasing the cost of

(i) Subsidies: Subsidies are monetary payments government budget to lower their prices Long-term, low-interest loans and tax reductions are examples of subsidies.