Tariff and non tariff barriers

NTBs arise from different measures taken by governments and authorities in the form of government laws, regulations, policies, conditions, restrictions or specific requirements, and private sector business practices, or prohibitions that protect the domestic industries from foreign competition.

Tariff and non tariff barriers

Significant progress has already been made in identifying those NTBs that affect intra-regional trade Tariff and non tariff barriers most. The identification process involved a number of important steps. First, a working definition of NTBs had to be agreed upon.

Second, it was decided to focus on those NTBs that affect the most widely-traded Products in the region.

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These products are those in chapters 27 minerals84 electrical appliances and 85 machinery of the Harmonised System classification. Customs surcharges are applied to about 2. Technical measures and product characteristic requirements come in second involving more than tariff lines.

Tariff and non tariff barriers

Finally we have monopolistic measures involving state-trading or the use of a selected or limited group of importers. These measures are classified under broad categories according to their nature. Within the broad categories, the measures are further subdivided according to their characteristics.

Special mention should be made of the measures for sensitive product categories and technical regulations, which are subdivided according to their corresponding objectives, i.

Four groups are distinguished: Additional charges Additional charges, which are levied on imported goods in addition to customs duties and surcharges and which have no internal equivalent, comprise various taxes and fees. The category of additional charges includes the tax on foreign exchange transactions, stamp tax, airport license fee, consular invoice fee, statistical tax, tax on transport facilities and charges for sensitive product categories.

It should be noted that Article VIII of GATT states that fees and charges other than customs duties and internal taxes shall be limited in amount to the approximate cost of services rendered and shall not represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purposes.

This practice is presented as a means to avoid fraud or to protect domestic industry.

What is a Non-Tariff Barrier (NTB)?

The decreed value de facto transforms an ad valorem duty into a specific duty. Most of these measures affect the cost of airports in a variable amount calculated on the basis of the existing difference between two prices of the same product.

The measures initially adopted can be administrative fixing of prices and voluntary restriction of the minimum price level of exports or investigation of prices, to subsequently arrive at one of the following adjustment mechanisms; suspension of airport licenses; application of variable charges, anti-dumping measures or countervailing duties.

Administrative price fixing of import prices By administrative price fixing, the authorities of the importing country take into account the domestic prices of the producer or consumer establish floor and ceiling price limits; or revert to determined international market values.

Various terms are used, depending on the country or sector, to denominate the different administrative price fixing methods, such as official prices, minimum import prices or basic import prices. Voluntary export price restraint A restraint arrangement in which the exporter agrees to keep the price of his goods above a certain level.

Variable charges Variable charges bring the market prices of imported agricultural and food products close to those of corresponding domestic products, in advance, for a given period of time, and for a pre-established price.

These prices, are known as reference prices, threshold prices or trigger prices. Primary commodities may be charged per total weight, while charges on processed foodstuffs can be levied in proportion to the primary product contents in the final product. In the case of the EU, the charges applied to primary products as such are called variable levies and those as part of a processed product, variable components.

They may increase the airport cost in a fashion similar to tariff measures.

Tariff and non tariff barriers

Advance import deposits Obligation to deposit a percentage of the value of the import transaction for a given time period in advance of the imports, with no allowance for interest to be accrued on the deposit.Non-Tariff Barriers to Trade.

Non-Tariff Barriers (NTBs) refer to restrictions that result from prohibitions, conditions, or specific market requirements that make importation or exportation of . Non-tariff barriers to trade induce the domestic producers to form monopolistic organisations with a view to keeping output low and prices high.

This is not possible under import duty. Non-tariff barriers remain ineffective if monopolistic tendencies prevail in the country. The WTO is the only international body dealing with the rules of trade between nations.

At its heart are the WTO agreements, the legal ground-rules for international commerce and for trade policy. Tariff and Non-Tariff Barriers are restrictions imposed on movement of goods between countries. It can be levied on imports and exports. Tariff and non tariff barriers are imposed for various reasons such as –.

Non-tariff barriers to trade (NTBs) or sometimes called "Non-Tariff Measures (NTMs)" are trade barriers that restrict imports or exports of goods or services through mechanisms other than the simple imposition of tariffs.

A nontariff barrier is a way to restrict trade using trade barriers in a form other than a tariff. Nontariff barriers include quotas, embargoes, sanctions, levies and other restrictions.

WTO | Understanding the WTO - Non-tariff barriers: red tape, etc