Question

Distinguish between tariff and non-tariff barriers.

Answer 1

1. With tariffs the Government receives the revenue whereas no revenue is received by the Government by applying non-tariff measures

2. Non-tariff measures protect the procedures and make them feel more secure than under a tariff. But incentives are not there under tariffs.

3. In tariff customer’s classification and valuation procedures pose a problem before the customs authorities. Where-as under non-tariff measures no such problem arises.

4. Non-tariff barriers to trade induce the domestic producers to form monopolistic organisations with a view to keeping output low and prices high. This is not possible under import duty.

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