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Non-Tariff Trade Barriers

Non-Tariff Trade Barriers. Discriminatory measures used by governments to keep imports out without using tariffs. Non-Tariff Trade Barriers. Import Quotas Voluntary Export Restraints Health and Safety Standards Government Procurements Domestic Content Requirements

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Non-Tariff Trade Barriers

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  1. Non-Tariff Trade Barriers Discriminatory measures used by governments to keep imports out without using tariffs

  2. Non-Tariff Trade Barriers • Import Quotas • Voluntary Export Restraints • Health and Safety Standards • Government Procurements • Domestic Content Requirements • Intellectual Property Rights • Export Subsidies

  3. Why Import Quotas? For the following reasons governments choose import quotas: • As insurance against further increases in import spending …. to improve balance of payments; and • To gain government officials greater administrative flexibility and power

  4. Monopoly is Not Created: Consumers lose; Producers gain; Importers gain quota rents; and Net National Loss of Welfare = Deadweight loss of trade restrictions Monopoly is Created: Consumers lose; Producers gain; Importers gain quota rents; and Net National Loss of Welfare = Deadweight loss of trade restrictions + Deadweight loss of monopoly Welfare Effects of Import Quotas

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