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Tariffs, quotas & NTBs

6 months ago
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Many countries seek to discourage imports through the imposition of tariffs, quotas and non-tariff barriers (NTBs) though they may agree to make concessions to selected countries, usually in exchange for some sort of trade agreement.

Many countries seek to discourage imports through the imposition of tariffs, quotas and non-tariff barriers (NTBs).

A tariff is a custom duty or form of tax imposed by a country on merchandise imports or, less frequently, exports. Often the aim of import tariffs is to protect or encourage domestic production though tariffs are also a useful source of revenue for government. Tariffs can be a fixed amount per unit of import or can vary with the value of the import (ad valorem). Tariffs are set according to the HS code of the import – and many of the codes leave considerable scope for argument.

Quotas are an alternative way of restricting the level of merchandise imports. Quite simply, they limit the volume of imports, possibly by number of units or, quite typically, by weight of commodity.

Governments also impose a wide range of non-tariff barriers, mostly in the form of technical regulations or health and food-safety requirements. These are described in the PROFIT factsheet on Standards. A complicated form of NTB arises from rules of origin which say how much of a product must be made in a specified country in order to count as an import from that country. Some products require an import licence.