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Question

Which among the following will be classified as non-tariff barrier ?

I. Phyto-sanitary measures.
II. Import and export licensing.
III. Countervailing duty
IV. Environmental standards

Select the answer from the code given below.

Codes :

The correct answer is
I and IV

Understanding Non-Tariff Barriers (NTBs)

Non-tariff barriers (NTBs) are trade restrictions imposed by governments that are not in the form of taxes or duties. They include regulations, standards, licensing, quotas, and other administrative measures designed to control or limit imports or exports.

Analysis of Trade Measures

Let's analyze each item to determine if it's a non-tariff barrier:

  • I. Phyto-sanitary measures: These are regulations related to plant and animal health standards. They aim to protect public health and prevent the spread of pests or diseases. While essential for safety, they can act as barriers if overly strict or discriminatory. These are considered NTBs.
  • II. Import and export licensing: This involves requiring government permission before goods can be imported or exported. While sometimes used for legitimate regulatory purposes, licensing systems can be complex and used to restrict trade flows, thus acting as NTBs.
  • III. Countervailing duty: This is a specific type of import tax imposed to offset subsidies given to importers by the exporting country. Since it is a duty or tax, it is classified as a tariff barrier, not a non-tariff barrier.
  • IV. Environmental standards: Similar to phyto-sanitary measures, these are rules and regulations set to protect the environment. They can impact trade by requiring imported goods to meet specific environmental criteria, potentially increasing costs or limiting market access. These are considered NTBs.

Identifying Non-Tariff Barriers

Based on the analysis:

  • Phyto-sanitary measures (I) are NTBs.
  • Import and export licensing (II) are typically considered NTBs.
  • Countervailing duty (III) is a tariff barrier.
  • Environmental standards (IV) are NTBs.

The question asks to identify which among the options are non-tariff barriers. Items I and IV clearly fall under the definition of non-tariff barriers as they represent standards and regulations rather than direct taxes.

Considering the provided options and the common classification of trade barriers, Phyto-sanitary measures (I) and Environmental standards (IV) are the measures identified as non-tariff barriers.

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Important Questions from International Trade

  1. Consider the following statements about the international financial sources :

    I. A Global Depository Receipt (GDR) is a bank certificate issued in more than one country for shares in a foreign country.

    II. A GDR is very similar to American Depository Receipt (ADR).

    Select the correct option.

  2. Which of the following documents is not required for obtaining export license?

  3. _________ was set up with prime objective of professionalizing the country’s foreign trade management by providing training, research and data dissemination.

  4. Which one of the following does not fall within the ambit of WTO operations ?

  5. The following statements relate to Restrictive Trade Practices (RTP). Choose the correct code for the statements being correct or incorrect.

    Statement I: Often the low price is the result of the predatory pricing strategy; prompting selling at prices below cost.

    Statement II: This is done with an aim to drive out existing competitors because predatory pricing is a restrictive trade practice.

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