Sunday, May 29, 2016

Barriers of foreign trade

Posted By: aftab hussain - 9:14 PM


& Comment

To protect the home industries government or regulatory bodies of the countries has impose trade barriers, to provide competitive edge for the home industries. Such type of barriers can decrease the competition for home industries and support to boost the national  industries. In order to shelter the home industries foreign trade has been obstructed in various forms they in brief are
·         Prohibition of import or exports
·         Custom duties
·         Quatas
·         Exchange control
·         Preferential treatment
·         Import monopolies
·         Import levies
Prohibition of import or exports
The government of the country  has set the law to prohibit the import or exports of certain commudities such type of laws are impose to boost the home industries. These laws promote the growth of certain industries in the country.
Custom duties
Tariffs are considered to be the oldest form of protection, they are imposed on the import and export of commidities.when tarrifs are imposed on the imports of commidities. It will encourage the domestic consumers and raise the domestic prices of the goods. When tariffs are impose on the exports it will discourage the exports and make sure to provide the commudities to domsetic producers tariffs and custom duties may be specific or ad valaram. When a tarrif is based on weight, quantity or other physical characteristics of imported goods, they are called specific. The duty is called ad valoram, when it is based on the value of the goods.
Exchange control
Exchange control complies the government  regulations relating to buying and selling of foreign exchange. In exchange control the exporters are surrender under the central bank of the country in exchange of domestic currency at the rate fixed by the governmnet. Exchange control may be resorted for correcting an adverse balance of payment.
To reduce imports government may restrict the total imports of a given commudities to a specific amount limit of a commudities. Which can be imported from each producing country. This devise of restiction imports is applied as an alternate to custom duties.
Preferential treatment
The government of a country may give preferential treatment intherate of taxes to some of the countries preferential tratement results in the formation of trade restriction. The countries of the world not impose preferential treatment , impose high tariffs in relation to the goods of the discrimination countries.
Import monopolies
Government of the country took the resposibility ofimporting all thecommodities. Insuch cases government of the country have sole monopoly over the commodities.
Import licences
Another barrier which restrict the import of goods from abroad the import licencing,the government of the country issues license to the importers for the import of foreign commudities, the trade is very much brought under control,this method is adopted for  curtailing.

About aftab hussain

Techism is an online Publication that complies Bizarre, Odd, Strange, Out of box facts about the stuff going around in the world which you may find hard to believe and understand. The Main Purpose of this site is to bring reality with a taste of entertainment


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