Measures of non-tariff regulation of foreign trade activity. Classification of non-tariff measures
Each state seeks to developnational industry. But how is this best done? The dispute between advocates of protectionism and free trade has not stopped for many centuries. In different time periods leading states tended to one side or the other. There are two ways to control export-import flows: customs duties and measures of non-tariff regulation. The latter will be discussed in the article.
Classification of non-tariff measures
National trade policy may beprotectionist, moderate or open (free). This division into groups is relatively relative, but it greatly helps in the analysis. To determine the rigidity of trade policy, not only duties and quotas are taken into account, but also measures of non-tariff regulation introduced by the country. And the latter are much harder to notice and appreciate, so they are so popular today. The following measures of non-tariff regulation are distinguished:
- Quantitative. This group includes importation (quoting) of imports, licensing of incoming and outgoing commodity flows and so-called "voluntary" export restrictions.
- Hidden measures of non-tariff regulation. This group includes public procurement, presentation of requirements for the content of local components, the introduction of technical barriers, taxes and fees. Hidden measures of non-tariff regulation are aimed at import regulation.
- Financial. This group includes subsidizing, lending to national producers and dumping. Financial methods serve to regulate exports.
This concludes with the economic measures of non-tariff regulation. Separately, it is necessary to identify legal instruments that are closely related to international trade.
Measurement of non-tariff methods
Quantitative, hidden and financial constraintsare poorly measurable, so they are often poorly represented in statistical data. However, several indices are usually used to measure non-tariff methods. Among the most famous:
The most common methods
Direct quantitative restrictions areadministrative form of non-tariff regulation by the state of trade flows, which determines the number of goods allowed for export or import. It must be understood that the imposed quota becomes a restriction only when it is reached. Tariff is the same always. Often, governments give preference to quotas. This is due to the fact that it is much easier to immediately establish a threshold volume than to calculate which tariff will lead to the export or import of this necessary quantity of goods. Quantitative restrictions can be imposed both by the decision of the government of one country, and on the basis of international agreements that regulate the trade in certain products. These include quotas, licensing and "voluntary" export restrictions.
Methods from the first subgroup are used mostoften. The quota and contingent are synonymous terms. The difference is only that the second is a shade of seasonality. A quota is a quantitative non-tariff measure that involves restricting imports or exports to a certain volume (amount). It is superimposed on a certain amount of time. By the direction of the quota are export and import. The former are usually introduced in accordance with international agreements or with a deficit in the domestic market. The imports are aimed at protecting the national producer and maintaining a positive trade balance. In terms of coverage, global and individual quotas are singled out. The former are imposed on the export or import of a certain commodity, and its origin is not taken into account. Individual quotas are imposed within the framework of global quotas and specify the country.
This type of quantitative restriction is closely relatedwith quotas. Licensing involves the issuance by the government of special permits for the export or import of a certain number of goods. This procedure can be performed both separately and within the quota. There are several types of licenses:
- One-time. It involves permission for one transaction, which is valid for not more than a year.
- General license. This permission is without the number of transactions, but which is valid for not more than a year.
- Automatic license. It issues promptly, and the application can not be rejected by state bodies.
Voluntary restrictions on export flows
Large states have many leverspressure on weaker countries. "Voluntary" export restriction is one of them. A weak country introduces it to its own detriment, in fact defending the national producer of a large state. Its effect is similar to import quotas. The difference is that one state imposes a restriction on another.
Hidden methods of protectionism
There are a huge number of measures that can be attributed to this group. Among them there are:
This group of methods is aimed at increasingexport. Financial mechanisms help in lowering the price of goods, which increases its competitiveness in the world market. In response to them, special anti-dumping and countervailing customs duties are introduced. The following financial methods are distinguished:
The latter view implies a decrease in exportprices at the expense of firms' resources for the purpose of promoting goods to the foreign market. Anti-dumping measures are used to combat such non-tariff policy. They represent a temporary fee, which is aimed at covering the difference between an understated price and a normal one. Anti-dumping measures neutralize the negative consequences of unfair competition.