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

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International Business- Dr. R. Chandran
imports to some extent and prevent free imports of commodities that are
not necessary.
4. Preferential treatment through trading blocs: Some countries form
regional groups and offer special concessions and preference to member
countries. As a result trade is developed among the member countries and
allows advantages to all member countries. On the other hand, it can
cause a considerable loss to non member countries, as a trading bloc acts
as a trade barrier. Even trade agreements and joint commissions are used
as trade barriers as they restrict free movement of goods at the
international level.
5. Customs regulations: Customs regulations and administrative regulations
are very complicated in many countries. There are a number of
‘Commodities Act,’ pertaining to the movement of drugs, medicines,
minerals, bullion etc. Restrictions under such acts are useful to curtail
imports. Tax administration also acts as barrier to free marketing
amongst countries.
6. State trading: State trading refers to import-export activities conducted by
the government or a government agency. Stat trading is useful to restrict
imports, as the final decision is taken by the government. Such state
trading acts as a barrier, restricting the freedom of private parties.
7. Foreign exchange regulations: Countries impose various restrictions on
the use f the foreign exchange earned through exports. Such restrictions
have the following objectives.
a) To restrict the demand for foreign exchange and to use the foreign
exchange reserves in the best possible manner.
b) To check the flow of capital.
c) To maintain the value of exchange rates. Under such regulations the
foreign exchange earned should be surrendered to the government.
The government provides foreign exchange to the businessmen as per
priorities that are fixed periodically.
8. Health and safety measures: Many countries have specific rules regarding
health and safety regulations, which are mainly applicable to raw
materials and food items. Imports are not allowed if the regulations are
not followed properly.
9. Miscellaneous non-tariff barriers: Such barriers include prior import
duties such as deposits, embargoes and import restrictions due to
environmental regulations, provision of subsidies to domestic industry,
canalization of imports of some commodities and technical and
administrative regulations. All such measures act as non-tariff barriers as
they restrict the free flow of goods and services between countries.
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