Introduction A key factor in any export business is clear understanding and detail knowledge of products to be exported. The selected product must be in demand in the countries where it is to be exported. Before making any selection, one should also consider the various government policies associated with the export of a particular product.
A tariff, or duty, is a tax levied on products when they cross the boundary of a customs area. The boundary may be that of a nation or a group of nations that has agreed to impose a common tax on goods entering its… Objectives of tariffs Tariffs may be levied either to raise revenue or to protect domestic industries, but a tariff designed primarily to raise revenue also may exercise a strong protective influence, while a tariff levied primarily for protection may yield revenue.
Gottfried von Haberler in The Theory of International Trade suggested that the best way to distinguish between revenue duties and protective duties disregarding the motives of the Tariff barriers introduction is to compare their effects on domestic versus foreign producers.
If domestically produced goods bear the same taxation as similar imported goods, or if the foreign goods subject to duty are not produced domestically, and if there are no domestically produced substitutes toward which demand is diverted because of the tariff, then the duty is not protective.
A purely protective duty tends to shift production away from the export industries and into the protected domestic industries or other industries producing substitutes for which demand is increased. On the other hand, a purely revenue duty will not cause resources to be invested in industries producing the taxed goods or close substitutes for such goods, but it will divert resources toward the production of those goods and services upon which the additional government receipts are spent.
From the standpoint of revenue alone, a country can levy an equivalent tax on domestic production to avoid protecting it or select a relatively small number of imported articles of general consumption and subject them to low duties so that there will be no tendency to shift resources into industries producing such taxed goods or substitutes for them.
If, on the other hand, a country wishes to protect its home industries, its list of protected commodities will be long and the tariff rates high. Political goals often motivate the imposition or removal of tariffs. Tariffs may be further classified into three groups—transit duties, export duties, and import duties.
Transit duties This type of duty is levied on commodities that originate in one country, cross another, and are consigned to a third. As the name implies, transit duties are levied by the country through which the goods pass.
Such duties are no longer important instruments of commercial policy, but, during the mercantilist period 16th—18th century and even up to the middle of the 19th century in some countries, they played a role in directing trade and controlling certain of its routes.
The most direct and immediate effect of transit duties is a reduction in the amount of commodities traded internationally and an increase in the cost of those products to the importing country. Export duties Export duties are no longer used to a great extent, except to tax certain mineral, petroleum, and agricultural products.
Several resource-rich countries depend upon export duties for much of their revenue. Export duties were common in the past, however, and were significant elements of mercantilist trade policies. Their main function was to safeguard domestic supplies rather than to raise revenue.
Export duties were first introduced in England by a statute in that imposed them on hides and wool. By the middle of the 17th century, the list of commodities subject to export duties had increased to include more than articles.
With the growth of free trade in the 19th century, export duties became less appealing; they were abolished in Englandin Franceand in Prussia At the beginning of the 20th century, only a few countries levied export duties. For example, Spain still levied them on cokeBolivia and Malaysia on tinItaly on objects of art, and Romania on forest products.
In the United States export duties were prohibited by the Constitution, mainly because of pressure from the South, which wanted no restriction on its freedom to export agricultural products. Export duties are now generally levied by raw-material-producing countries rather than by advanced industrial countries.“The homogenizing influences of globalization that are most often condemned by the new nationalists and by cultural romanticists are actually positive; globalization promotes integration and the removal not only of cultural barriers but of many of the negative dimensions of culture.
The example illustrates how difficult it is to deal with non-tariff barriers to trade. The Mexicans could protest the decisions of the US Department of Agriculture, but the Florida growers who were competing with the Mexican growers, in effect, wrote their own regulations.
DAD Delivery against documents. The requirement by a shipper that the recipient provides certain documents in order to be given the shipment. characterizes variable import levies as non-tariff barriers. See Nogues et al.
() for another list of non-tariff bar-riers that includes variable import levies.
Second, Laird and Yeats (forthcoming) provide the most up-to-datedata on non-tariff barriers and we have no way to . According to the World Trade Organization, non-tariff barriers to trade include import licensing, rules for valuation of goods at customs, pre-shipment inspections, rules of origin ('made in'), and trade prepared investment measures.
Non-tariff barriers to trade (NTBs) or sometimes called "Non-Tariff Measures (NTMs)" are trade barriers that restrict imports or exports of goods or services through mechanisms other than the simple imposition of lausannecongress2018.com SADC says, "a Non-Tariff Barrier is any obstacle to international trade that is not an import or export duty.
They may take the form of import quotas, subsidies, customs.