IN312 International Trade
Chapter 4
“Trade Barriers & Regulations”
Department of International Trade & Marketing (ITM)
http://www3.FITnyc.edu/ITM
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Trade Barriers and Regulations - Lecture Notes | IN 312, Study notes of International Business
Material Type: Notes; Class: INTERNATIONAL TRADE; Subject: International Trade & Mkt; University: Fashion Institute of Technology; Term: Spring 2009;
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IN312 International Trade
Chapter 4 “Trade Barriers & Regulations” Department of International Trade & Marketing (ITM)http://www3.FITnyc.edu/ITM
Chapter 4 – Trade Barriers & Regulation^ The Evolution of TradeThe
Evolution of Trade
Globalization : –^ Countries :^
1400-1865^ Colonialism1866-
“Golden Era”
-^ Companies :^ 1915-
Keynesian revolution Companies :^ 1915 1945
Keynesian revolution1946-^
GATT, MFA1990-2000 WTO, outsourcing
-^ Individuals :^ 2001-Present
Global markets
Examples of TariffsPRODUCT^
RATE OF DUTY
PRODUCT^
RATE OF DUTY
Specific Tariffs^ Chickens ducks turkeys
$0 02^ h Chickens, ducks, turkeysCattle 1,550 Kg or more
$0.02^ each$0,007 per kg.
Ad Valorem TariffsAd^ Valorem Tariffs^ Reptile leather luggageWomen’s raincoats
8.5% ad valorem8.9% ad valorem
Combined Tariffs^ Baby sweaters of woolMen’s ties of man-made fiber
$0.318 per kg + 14.4% ad$0 248 per kg + 12 7% ad Men s ties of man made fiber
$0.248 per kg + 12.7% ad
Going Global, page 93
Transaction^ Value Price of goods when sold for export (or “Import Value”) FREE ON BOARDCOST-INSURANCE-FREIGHT(FOB)
(CIF) Value of good when loaded oncarrier to leave exporting country
Value of good when it arrives toimporting country Seller pays for freight to thecarrier
Makes “transaction value” higherUsed by the European Union Cost of freight to the carrier isincluded on product price
Used by the European UnionHence, European retail prices ofimports ten to be higher than US’s Used by the U.S.
imports ten to be higher than US s
Going Global, page 94
General Agreement on Tariffs & Trade GATT was created in 1947 to liberalize trade using amultilateral approach.^ 120 contracting partners plus 30associate subscribersGATT’s Main Principles: 1. Most Favored Nation^
(MFN). Trade w/o discrimination
- Protection through tariff
Instead of other barriers
- Protection through tariff
Instead of other barriers
- A stable basis for trade
Agreed upon tariffs are binding
- Quotas are prohibited
But permitted under some circumstances It was understood that
trade on T&A would be exempted
from
It was understood that
trade on T&A would be exempted
from
these principles. Developing countries used 2 tools to continue restricting T&A imports:1. Import-substitution policies2. A Balance of Payment provision of GATT (article XVIII)