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Chapter 7 -- Non-tariff Barriers.ppt
Eastwoods ECO 486 Notes Non-tariff Barriers and Arguments for Protection Chapter 7 -- Non-tariff Barriers INTERNATIONAL ECONOMICS, ECO 486 Learning Objectives Learn about some specific non-tariff barriers, NTB Explain why the welfare effects of quotas are worse than those of tariffs Explain why the welfare effects of VER are worse than those of quotas Analyze the welfare effects of a domestic production subsidy Analyze the welfare effects of an export subsidy Analyze validity of arguments for protection Learning Objectives Learn about some specific non-tariff barriers, NTB Explain why the welfare effects of quotas are worse than those of tariffs Explain why the welfare effects of VER are worse than those of quotas Analyze the welfare effects of a domestic production subsidy Analyze the welfare effects of an export subsidy Analyze validity of arguments for protection Non-tariff Barriers Quotas are a quantitative restriction on the import of a particular good Value quotas are less common Most quotas on manufactured goods long prohibited by GATT Embargo – quota equal to zero Non-tariff Barriers Voluntary export restraints VER are agreements between two governments in which the government of the exporting country agrees to restrain the volume of its own exports. Met letter, but not spirit, of GATT prohibition of quotas Non-tariff Barriers Tariff-rate quotas TRQs , allow quantities below the quota to enter at low tariff rates. Once the quota is exceeded a higher tariff applies. WTO members are beginning to replace existing quotas with TRQs Quotas on apparel and textiles are to be phased out by 2005 Exceptions are allowed More detail in chapter 8. Non-tariff Barriers Export subsidies and countervailing duties Government procurement policies Health and safety standards Failure to protect intellectual property rights Labeling requirements Jones Act of 1920 Many more More Non-tariff Barriers International Commodity Agreements Multifibre Arrangement Cartels internatio
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