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

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International Business- Dr. R. Chandran
imports the goods, but they adversely affect the volumes of both imports and
exports. The volume of exports is reduced due to such trade restrictions and
the tariff results in an escalation in prices.
OBJECTIVES OF TRADE BARRIERS
1. To protect domestic industries from foreign goods.
2. To promote new industries and research and development activities by
providing a home market for domestic industries.
3. To maintain favourable balance of payment, by restricting imports
from foreign countries.
4. To conserve foreign exchange reserves of the country by restricting
imports from foreign countries.
5. To protect the national economy from dumping by other countries
with surplus production.
6. To mobilize additional revenue by imposing heavy duties on imports.
This also restricts conspicuous consumption within the country.
7. To counteract trade barriers imposed by other countries.
8. To encourage domestic production in the domestic market and thereby
make the country strong and self-sufficient.
Since trade barriers are harmful for the growth of free trade, efforts were
made to reduce such trade barriers, and international organisations initiated
collective efforts of all countries involved in trade. WTO ministerial
conferences held in concern or Doha Qatar or Hong Kong are focused on
breaking barriers of trading in different forms.
TYPES OF TRADE BARRIERS
Broadly, Trade barriers are classified as tariff barriers and non-tariff barriers.
They are now an inseparable part of global business and the location of a
business operation and pricing decisions are determined by tariffs. A country
may use both tariff and non-tariff barriers order to restrict the entry of
foreign goods.
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