1. International Economics By Robert J. Carbaugh 9th Edition
Chapter 5:
Nontariff Trade Barriers

2. Types of non-tariff barriers
Import quotas
Quotas are a restriction on the quantity of a good that may be imported in any one period (usually below free-trade levels)
Global quotas restrict the total quantity of an import, regardless of origin
Selective quotas restrict the quantity of a good coming from a particular country
Carbaugh, Chap. 6

3. Import quota: trade & welfare effects
Types of non-tariff barriers
Import quota: trade & welfare effects
Carbaugh, Chap. 6

4. Effects of a quota on sugar imports
Types of non-tariff barriers
Effects of a quota on sugar imports
Carbaugh, Chap. 6

5. Comparing tariffs and quotas
Types of non-tariff barriers
Comparing tariffs and quotas
Carbaugh, Chap. 6

6. Tariff-rate quota The tariff-rate quota is a two-tiered tariff
Types of non-tariff barriers
Tariff-rate quota
The tariff-rate quota is a two-tiered tariff
A specified number of goods (up to the quota limit) may be imported at one (lower) tariff rate, while imports in excess of the quota face a higher tariff rate
Carbaugh, Chap. 6

7. Tariff-rate quota: trade & welfare effects
Types of non-tariff barriers
Tariff-rate quota: trade & welfare effects
Carbaugh, Chap. 6

8. Orderly marketing agreements
Types of non-tariff barriers
Orderly marketing agreements
Market sharing pact signed by trading partners
Intended to protect less efficient domestic producers
Usually involve voluntary export restraints, or export quotas
Recent trade negotiations have restricted the use of these agreements
Carbaugh, Chap. 6

9. Effects of a voluntary export quota
Types of non-tariff barriers
Effects of a voluntary export quota
Carbaugh, Chap. 6

10. Domestic content requirements
Types of non-tariff barriers
Domestic content requirements
Rules that require a certain percentage of a product’s total value to be produced domestically
Often has the effect of forcing lower-priced imports to include higher-cost domestic components or be assembled in a higher-cost domestic market
Carbaugh, Chap. 6

11. Domestic content: trade & welfare effects
Types of non-tariff barriers
Domestic content: trade & welfare effects
Carbaugh, Chap. 6

12. Subsidies Domestic subsidy Export subsidy
Types of non-tariff barriers
Subsidies
Domestic subsidy
Payments made to import-competing producers to raise the price they receive above the market price
Export subsidy
Payments and incentives offered to export producers intended to raise the volume of exports
Carbaugh, Chap. 6

13. Subsidies: trade & welfare effects
Types of non-tariff barriers
Subsidies: trade & welfare effects
Carbaugh, Chap. 6

14. Subsidies: trade & welfare effects
Types of non-tariff barriers
Subsidies: trade & welfare effects
Carbaugh, Chap. 6

15. Types of non-tariff barriers
Dumping
The practice of selling a product at a lower price in export markets than at home (or exporting at prices below production cost)
Sporadic dumping - to clear unwanted inventories or cope with excess capacity
Predatory dumping - to undermine foreign competitors
Persistent dumping - reaping greater profits by engaging in price discrimination
Carbaugh, Chap. 6

16. Other NTBs Government procurement policies
Types of non-tariff barriers
Other NTBs
Government procurement policies
Social regulations (health, environmental and safety rules can also restrict trade)
Sea transport and freight restrictions
Carbaugh, Chap. 6