What are non-tariff barriers?
Even though foreign trade is done in what we call the “free market”, there are barriers that prevent a completely free exchange of goods. Most of these restrictions are in the form of tariffs: fees on the import of products to collect taxes or to have control over imported products.
In addition to these, there are other less-known technical and politically driven barriers known as non-tariff barriers. According to the United Nations Conference on Trade and Development (UNCTAD), these measures are defined as: “policy measures other than ordinary customs tariffs that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both.” (2012)
These measures are of great significance, as they cover a series of elements with which products must comply, depending on the production process, market presence, or trade and political relations among countries. Generally, countries impose non-tariff barriers when they need to protect their internal markets from goods that pose a risk to their local economy and the well-being of their population.
In 2012, UNCTAD established a series of non-tariff barriers for international trade. In total, there are 16 types of non-tariffs barriers that are divided into three categories: Technical Measures, which consist of specifications and standards with which imported products must comply, Non-technical Measures, or restrictions on price control, intellectual property, and rules of origin, and Export Measures, or rules applied by the government of the exporter’s country in regard to quotas, permits or political reasons.
Here are some of the most important non-tariff barriers that are often applied in international trade:
- Sanitary and phytosanitary measures: Technical barriers that establish rules for commercialization, import, and production of food, plants, & animals. Their objective is to prevent the entrance of pests and diseases that may affect countries’ populations, flora, and fauna.
- Technical barriers to trade: Standards that determine if a product meets certain quality requirements in order to be imported and compete with other goods in the national market.
- Rules of origin: Criteria that define the origin of goods that are produced in a certain country. In the event that the product does not comply with the rule, countries can impose safeguard and anti-dumping measures.
- Intellectual property: Measures related to intellectual property rights. They are used to check that goods comply with patents, trademarks, and copyrights.
- Distribution restrictions: Restrictions applied when a government limits or hinders the distribution of goods in certain areas of a country.
- Quotas: Restrictions on the import of a product by limiting the amounts authorized to be imported.
Correctly understanding all the rules that control international trade is a challenge that any company will encounter if they want to expand their business abroad. That is why it is important to have an ally specialized in foreign trade. At Woodward Logistics we have the experience and expertise to guide your company through any challenge to meet all of your import and export needs. Visit our website to learn about the logistics solutions we have for you.