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Ibt Expl.

The document discusses various types of trade policies and trade barriers that governments impose including tariffs, subsidies, import quotas, voluntary export restraints, local content requirements, administrative trade policies, and anti-dumping duties. The purpose of these policies is outlined for protecting domestic industries, consumers and national security.

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Mary Ellen Luceña
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7 views2 pages

Ibt Expl.

The document discusses various types of trade policies and trade barriers that governments impose including tariffs, subsidies, import quotas, voluntary export restraints, local content requirements, administrative trade policies, and anti-dumping duties. The purpose of these policies is outlined for protecting domestic industries, consumers and national security.

Uploaded by

Mary Ellen Luceña
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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- ry.

#2 To protect domestic consumers


- To ensure the safety and quality of imported goods. Some cheap imported goods may be dangerous to
consumers. For example, the goods may contain elements that may harm consumers. Government imposed
tariffs to ensure na mameet ang specific standards and regulations na meron ang country.
#3 To preserve national security
- The government imposed tariffs to avoid from overdependence on imports.
Two categories of tariffs
 A specific tariff is one imposed on one unit of a good (e.g., $1,000 tariff on each imported car).
 Ad valorem tariff is a tariff levied as a certain percentage of a good’s value (e.g., 10% of the value of an imported
car).

Subsidy
Subsidy
- is a form of financial assistance provided by the government to domestic producers, individuals, households,
or businesses. The purposfdsffdggggggggggggggggggggggge of a subsidy is to support and promote certain
economic activities.
 One of the example is government may provide subsidized loans or credit insurance to exporters, by this may
access sila to affordable financing para sa export operations nila and this helps to mitigate the financial risks ng
international trade and encourages companies para mag explore sa bagong export opportunities.
Most economists consider a subsidy a failure if it fails to improve the overall economy. However, policymakers
might still consider it a success if it helps achieve a different objective.
- It simply means subsidy is a success kapag nagkaroon ng positive outcomes para sa lahat like economic
growth pero failure ito sa kaniefddgfgfgfgfgfgfgfgfgfla kapag naman more on result ng goals nila ay inflation.
Pero sa mga policymakers or government it was still a success kasi may mga program na long term or wala
agad na immediate positive impact like government invest in renewable energy insfrastrature, success ito
kasi they know that it can help to reduce carbon emissions, sustainable developments, etc.

Import Quota
A quota
- is a government-imposed trade restriction that limits the number or monetary value of goods that a country
can import or export during a particular period.
Countries use quotas in international trade to help regulate the volume of trade between them and other
countries.
- Countries sometimes impose quotas on specific products to reduce imports and increase domestic
production. And restricting foreign competition.
Difference between quota and tariffs
- Quotas focus on limiting the quantities (or, in some cases, cumulative value) of a particular good that a
country imports or exports for a specific perererewrerewrerwerwerweeriod, whereas tariffs impose specific
fees on those goods. For example, is textile quota system, may specific limit of quotas lang kailan iimport sa
other country na textile para na rin mapreserve yung jobs sa textile and ang tariffs naman is yung value na
iimposed or ippataw.

Voluntary Export Restraint (VER)


Voluntary export restraint (VER)
- is a trade restriction on the quantity of a good that an exporting country, it is a self-imposed by the exporting
country. Unlike traditional quotas na ang importing countries ang nagiimpose, sa VER the one who is
implementing is the exporting country. The exporting countries voluntarily agrees to limit its exports of a
particular product to the importing countries. Or sometimes importing countries request with this para na
rin maprotaktahan and domestic producers.
Differences
 Quota: importing country handles the administration.
 VER: exporting country handles the administration.

Local Content Requirements


Local content requirements (LCR)
- Is a policy or regulation that mandates a specific percentage of a goods or product to be produced
domestically.
- LCR is to encourage domestic production and local resources like labor, materials, etc. For example, filipino
workers and resources from Philippines.
- LCR in international trade is depend by the laws to be applied to international companies.
 The main aim of the local content requirements is promoting domestic industrial development, creating
employment opportunities and reducing dependence on imports.

Administrative trade policies


- consist of bureaucratic rules, laws, and regulations implemented by a country`s government.
- The primary intent is not to make it difficult for imports to enter a country instead these typically
implemented to regulate and control trade activities, ensure compliance with legal requirements, product
standards, safety measures and to protect the interests of the country. Also govern customs procedures like
documentation, valuation, inspection of imported goods to prevent smuggling or illegal trade activities.

Anti-Dumping Duty
Anti-dumping duty
- Is a policy or trade measures implemented by a country`s government to address the practice of dumping.

What is dumping?

- Dumping occurs when foreign firms or companies sell their products in a foreign market at prices below their
normal value or below the cost of production which is considered unfair competition.
Anti-dumping policies involve an investigation process like examining the pricing practices, costs and market
conditions of the imported products. And if found guilty or may dumping the importing countries may impose
antidumping duties or tariffs. Main aim is to protect domestic production and prevent unfair competition.

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