Non-tariff barrier to trade

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Non-tariff trade barriers are indirect protectionist measures to restrict foreign trade that are not tariffs , levies or export subsidies . They make it difficult for foreign providers to access the market.

classification

Non-tariff barriers to trade (NTBs) are instruments of foreign trade policy alongside tariff trade barriers . While the import of tariff trade barriers is mainly influenced by tariffs and import taxes, a number of other instruments are used with NTBs. In addition, a number of social and environmental regulations also have an impact on trade.

backgrounds

Non-tariff trade barriers did not play a significant role in trade policy until the 1960s and 1970s. Although they already existed in certain forms and to a certain extent in the countries before, these trade barriers did not gain in importance until the 1970s. The trigger for the public debate was the planned tariff reduction. For example, the non-tariff trade barriers only became important after the significant abolition of tariffs for trade policy - as the so-called “second layer of protectionism”. Governments could no longer resort to tariffs to protect certain national industries from foreign competition.

The EU regulation, which claims all customs revenue at the EU's external border as revenue for the community, also eliminates the fiscal incentive to generate revenue for individual EU states.

Since the 1970s, more and more non-tariff trade barriers have been put in place. In addition, the increasing number of direct investments - combined with the steadily growing trade in services - contributed significantly to the importance of national regulations. These serve to limit the establishment of subsidiaries abroad. This used to be regulated by customs duties.

Despite an absolute ban on the establishment and maintenance of non-tariff trade barriers by the World Trade Organization (WTO), these were largely introduced as a replacement for tariff trade barriers (especially tariffs). The industrialized countries in particular often use high standards (compare, for example, the European Banana Regulation ) to discriminate against foreign suppliers.

Formally, however, non-tariff trade barriers need not be aimed at restricting competition. Rather, advocates argue that these barriers serve to protect consumers from inferior or poor quality goods through norms and standards.

Forms of non-tariff trade barriers

Import quotas

By setting import quotas , a state has the option of restricting the amount of goods imported.

  • Example: Import quota for cheese to the USA:
Only certain trading companies are allowed to import cheese. The annual upper limit is given to them. The quota is based on the amount that a company imported in the previous year.

The restriction of imports through quotas leads to price increases of the imported goods in the importing country, which also have an effect on the domestically manufactured products or helps to stabilize their possibly higher price level. As a rule, the quotas do not generate any income for the state, but flow to the holders of import licenses as profits (quota rents).

Voluntary export restrictions

Voluntary export restrictions are trade quotas that are set by the exporting countries themselves. This is mainly done under pressure from the importing country. The exporting country tries to prevent stricter measures such as quotas or import bans on the part of the importing country through voluntary export restrictions. The effects are similar to those of the import quotas and are associated with producer profits, consumer losses and welfare losses.

  • Example: Japanese cars
In 1981, Japan signed the first agreement with the US , the content of which was to limit Japanese automobile exports to the US to 1.68 million automobiles. The US government had asked Japan to restrict its exports. Since the Japanese feared unilateral protectionist measures on the part of the USA, they agreed to do so.
The coffee agreements that have been in place with most of the producing countries since 1963 and v. a. were closed to the western industrialized countries as main sales regions and provided annual export quantities per producer country, should serve the following goals: 1. to stabilize the export income of the producer countries and 2. to achieve an increase in the quality level for the consumer countries, since with fluctuating prices not with sufficient investments in the Coffee growing was to be expected.

Local content clauses

The provisions of local content clauses are intended to ensure that a certain proportion of an end product comes from domestic production. The local content laws were mainly applied in developing countries whose industries were geared towards pure final assembly . The goal was a transition to the manufacture of intermediate products. A company fulfills the local content clauses if it purchases the compulsory share of intermediate products from domestic production. The company is not forced to use these itself, but can also export the intermediate products. Through the use of local content clauses, the state does not receive any income or quota rents. For example, motor vehicles Completely Knocked Down or Semi Knocked Down - as a kit - are delivered to a country and assembled there in order to generate local added value . However, it would be much less time-consuming to export finished cars instead of the kits - the benefits are offset by considerable expense. Industrial policy or aspects of prestige often play a major role in such projects.

Other forms

The above are the most important or well-known non-tariff barriers to trade. There are also a number of other NTBs. Among other things, technical norms and standards (see DIN ), import licenses, packaging and labeling regulations (Made in ...), psychological influencing of consumers to purchase local products, social and environmental standards, anti- dumping rules , tendering modalities for orders (especially in the construction industry), preferences in government procurement, import depots with which the time between application and payment of a transaction is artificially extended, threats of trade policy measures (tariffs, etc.) as well as discrimination in customs clearance.

  • Example of discrimination in customs clearance - France:
From 1982 onwards, all Japanese video recorders in France had to pass through a small customs office in Poitiers when they were imported , which was completely overloaded with the crowd
  • Example of safety regulations as a trade barrier - USA:
In the USA, the sale of surprise eggs is prohibited because of the small parts they contain, which could be harmful to children.
  • Example of trade barriers due to different health and environmental standards - USA:
In the USA, imports of German hops were banned because of excessive pesticide loads.
  • Example of trade barriers due to national procurement - USA:
In the US, the government prefers US-made products in its purchases under the Buy American Act
  • Example of trade barriers due to protected designations of origin - Germany, France
The u. a. Protected designations of origin existing in Germany and France: Champagne, Nuremberg gingerbread, Lübeck marzipan are v. a. seen as an obstacle to trade by non-European manufacturers who want to offer goods under the same product name.

With regard to trade in services and foreign direct investment, there are provisions on the value and volume of transactions, provisions on the percentage of foreign capital.

Furthermore, access is made more difficult for foreign service providers due to certain requirements and qualifications.

This also includes the restrictions that result for service providers and tradespeople due to the chamber system that is widespread in German-speaking countries and its functions that regulate professional access (e.g. chambers of commerce , chambers of crafts , chambers of tax advisors )

WTO rules on non-tariff trade barriers

In order to promote international trade , the World Trade Organization (WTO) has set itself the task of removing all kinds of trade barriers. The relevant provisions of the WTO are to be observed by all members when designing their trade policy. In terms of discriminatory or protectionist NTBs, there is an absolute ban in the WTO treaty. The provisions on the dismantling of unjustified NTBs are anchored in various WTO agreements for trade in goods and GATS for trade in services. It also regulates numerous exceptions that allow certain state NTBs. Regulations that are intended to protect the life and health of people, animals and plants, public morality and order, as well as national cultural assets or exhaustible natural resources are partly permissible. The prerequisite for this is that the most trade-friendly agent is used, d. H. the state measure must be necessary, non-discriminatory and appropriate (“e.g. no import ban if the information through labeling would achieve the same purpose”). NTBs that are generated by private persons or companies, such as cartels , are not regulated by the WTO.

literature

  • Paul R. Krugman, Maurice Obstfeld: International Economics, Theory and Politics of Foreign Trade. 7th edition, Munich: Pearson Studium, 2006, ISBN 978-3-8273-7199-7

Web links

Individual evidence

  1. ↑ a b Continuation: Terms and concepts of international economic relations ( Memento of February 8, 2008 in the Internet Archive ), German Society for Foreign Policy
  2. ↑ a b Ralf Kronberger (Ed.): Non-tariff trade barriers increasingly important for trade policy ( Memento from July 25, 2012 in the Internet Archive ), analysis by the Austrian Chamber of Commerce .
  3. ↑ Krugman / Obstfeld, p. 254.
  4. ↑ Krugman / Obstfeld, pp. 257-258.
  5. ↑ Krugman / Obstfeld, p. 259.
  6. ↑ World Trade Organization (WTO) , website of the German Federal Government (accessed: April 12, 2008).