International-Business-Dr-R-Chandran-E-book

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International Business- Dr. R. Chandran
11. TRADE BARRIERS
Diamond will not glitter without going through
tedious process;
Vessels cannot sail all the time without resistance;
And even on fertile soils the plant has to out grow the
harmful weeds to give yields.
Learning Value:
After completing the chapter one will understand:
1. The importance of barriers
2. Types of trade barriers
3. Impact of barriers in international business
4. Benefits to home and host countries
5. Relevance of trade barriers in the current decade
A trade barrier is defined as “any hurdle, impediment or road block that
hampers the smooth flow of goods, services and payments from one
destination to another”. They arise from the rules and regulations governing
trade either from home country or host country or intermediary. Trade
barriers are man-made obstacles to the free movement of goods between
different countries, and impose artificial restrictions on trading activities
between countries. Despite the fact that all international organisations such
as GATT, WTO and UNCTAD advocate reduction or elimination of
barriers, they still continue in different forms.
Free and fair international trade is an ideal situation as it is beneficial to all
countries. However, different countries impose various types of barriers. The
contribution of GATT in removing such trade barriers has not been
satisfactory as even now, both developed and developing countries, present
such trade barriers. Such barriers are usually imposed by the country that
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