Methods of Reducing Imports

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Methods of Reducing Imports

At the very outset, the World Trade Organisation (WTO) having as central aim to free up trade and declaring that ‘ the system’s overriding purpose is to help trade flow as freely as possible’, had following the Doha Development Agenda implemented trade liberalisation measures.

As such, the Doha Round was launched, where the ministers placed the needs and interests of the developing countries at the heart of the Work Programme adopted in the Declaration, they said, “We shall continue to make positive efforts designed to ensure that developing countries, and especially the least-developed among them, secure a share in the growth of world trade commensurate with the needs of their economic development. In this context, enhanced market access, balanced rules, and well targeted, sustainably financed technical assistance and capacity-building programmes have important roles to play.” Hence, the developing countries expect that the new round of trade negotiations will target tariff peaks, high tariffs, and tariff acceleration that have been restricting them to push the enhancement of their export market share in world markets in general, and particularly, in developed countries.

Furthermore, following the decline of tariff rates resulting from the eight multilateral trade negotiations rounds and trade liberalisation agreements, there has been a rise in the relative importance of Non-Tariff Measures.

Definition of Non-Tariff Measures

Generally, there is no specific definition of the Non-Tariff Measures (NTMs). Yet, NTMs are defined as encompassing any measures (public or private) other than usual tariffs to liberalise international trade flows.

Consequently, in practice, most of the NTMs have been criticised to be impediments to international trade, increasing the price of both imports and import-competing good. Therefore, favouring domestic over foreign supply sources by obliging importers and foreign exporters to charge higher prices or limit the volume of imports.

Types of Non-Tariff Measures

Accordingly, there are various types of Non-Tariffs Measures, for instance, Laird and Vossenaar (1991), have put forward a broad classification of NTMs, identifying five categories, below are an illustration of these NTMs.

Measures to control the volume of imports

These measures constitute prohibitions like quotas, quantitative restraint (QRs) on imports with exports restraint agreement (ERAs), voluntary export restraints (VERs), non-automatic licensing, import authorisation and States trading or sole import monopolies.

Prohibitions may generally or specifically apply to arms and munitions, military equipments except imported to armed forces, drugs except when imported to health authorities or scientific purposes, plants or animals especially, the endangered species. Thus, if certain standards are met with, the imports may be prohibited.

Quotas are restricts the quantity or value of imported goods, which are set for a specific time period and are modified over times.

Non-automatic licensing is more expressly a way to administer conditional prohibitions or quotas.

VERs are usually informal export restraint arrangements (ERAs) between an exporter and an importer whereby the former agrees to restrict, for a certain time period, the exports of certain goods to the market of the imports to shun the imposition of import quotas. They are often industry-to-industry arrangements, but Governments can be involved on a more or less formal basis.

States trading or import monopolies are processes whereby only the government agency has the right to trade or grants that right to a private monopolies.

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Measures to control the price of imported goods

These measures can be further subdivided into tariff-type or para-tariff measures and price NTMs.

Para-tariff Measures

These comprise of customs surcharges, domestic charges levied on imports, variable levies, anti-dumping duties, countervailing duties, additional charges.