ChapterFour外文文献.ppt

Chapter Four Measurements of International Trade Full specialization is only possible when completely free trade is permitted. Unfortunately, every country in the world has trade barriers which are designed to protect its economy against international market forces. These restrictions tend to reduce world trade. They also decrease the customers freedom of choice among different products. In addition, they encourage domestic production in areas which are economically inefficient. Such restrictions may be divided into tariff barriers and non-tariff barriers (NTBs). I. Tariffs or Customs Duties 1. Definition Tariffs are simply taxes imposed by the government of a country on products when they cross the boundary of the customs territory for the purpose of either protecting domestic industries from foreign competition or collecting revenues for the government. 2. Reasons for Trade Barriers Protection of an infant industry. Protection of the home market Foreign Exchange Requirements. Capital accumulation. Maintenance of Standard of living and real wages Conservation of Natural Resources. Reasons for Trade Barriers (Contd.). Industrialization of a Developing Nation. Maintenance of employment and reduction of unemployment. National Defense Increase of business size. Self-reliance Retaliation, bargaining, balance of trade, etc. 3. Effects of tariffs 1) Positive effect on a country 2) Negative effects or side-effects 1) Positive effect on a country A. Increasing national financial revenue B. Protection of domestic market C. Balancing of domestic supply and demand and regulating the prices D. Balancing exports and import 2) Negative effects or side-effects A. Burdening the domestic consumers B. Prohibiting and affecting the domestic technological developments C. Deteriorating the trade relations between countries D. Hindering the development of the international trade 4. Classifications of tariffs Tariffs are classified on the basis of objects