国际贸易双语教案问题答案Pugel_14_SG_AKEY (9)

CHAPTER 9

NONTARIFF BARRIERS TO IMPORTS

Objectives of the Chapter

This chapter notes the numerous other ways to restrict foreign trade without using a tariff. Nontariff barriers (NTBs) have gained importance since World War II as a result of continuous multilateral negotiations to cut tariffs. Many of these barriers reduce imports to a fixed amount by either setting an import quota or coercing the exporting country to limit its exported quantity. Other barriers restrict the quantity of imports through discrimination by quality or content.

Import tariffs, import quotas, and voluntary export restraints (VERs) all have the same effects on the home country’s producers and consumers:the producers win and the consumers lose. The major difference in economic impact comes in who receives the profits from higher-priced imports. In the case of a tariff, the government collects the revenue in the form of the import tax. In the case of a quota, the government may auction rights to import the limited quota amount (in which case the quota looks just like a tariff), or the government may use some alternative form of license distribution such as favoritism (in which case the cronies who receive the licenses get the windfall). With a VER, the windfall goes to the agents in the exporting country who get the privilege of selling expensive imports to the country. After studying Chapter 9 you should know

1. the rationale behind imposing nontariff trade barriers.

2. the import quota and reasons for using it.

3. how a tariff and a quota can be equivalent.

4. the ways to allocate import licenses.

5. the comparisons between import quotas and VERs.

6. other costs that arise from erecting import barriers, such as foreign retaliation.

Important Concepts

Domestic content requirements: Directs that a product made or assembled in a country must have a

certain amount of “domestic value,” in the form of local factors of

production that are used in (or locally made components that are part

of) the finished product.

Fixed favoritism: A way of allocating import licenses in which the government simply

assigns fixed shares to firms, often based on the shares of imports

the firms had before the quota was imposed.

Import license: A legal right to import goods subject to quotas or other nontariff

barriers. Import licenses can be allocated by governments using

competitive auction, fixed favoritism, or resource-using application

procedures.

Import quota: A limit on total quantity of imports allowed into a country each year.

Import quotas are the most common nontariff trade barrier.