In the context of trade policy tools, Which of the following is considered as non-tariff measure?
I. Anti-dumping measures
II. Technical barriers to trade measures
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3: Both I and II.
Explanation:
- In international trade, countries employ two types of barriers to protect their domestic industries and regulate imports: Tariffs and Non-Tariff Measures (NTMs).
- Non-Tariff Measures (NTMs): These are policy measures (other than customs duties or tariffs) that can be used to alter the volume or price of goods in international trade.
- Anti-dumping measures: These include regulations imposed to prevent a country from exporting goods at a price lower than its production cost.
- Technical Barriers to Trade (TBT): These comprise technical regulations, standards, and testing procedures that are made mandatory for imported goods.
Some other examples of Non-Tariff Measures (NTMs):
Quotas: Setting a limit on the quantity of goods that may be imported.
Import Licensing: Obtaining specific permission from the government to import goods.
Sanitary and Phytosanitary (SPS) measures: Strict regulations imposed to protect human, animal, or plant health.
Voluntary Export Restraints (VER): Instances where an exporting country voluntarily agrees to limit the quantity of its own exports.
Additional Facts:
- Tariff: This is a direct 'tax' or customs duty levied on imported goods.
- World Trade Organization (WTO): The objective of the WTO is to reduce these tariff and non-tariff barriers among nations to facilitate the smooth flow of trade.
- Anti-dumping Duty: This duty is imposed to protect domestic manufacturers from the unfair trade practices of foreign companies.
Potential Question for Upcoming Exams:
Question: Under the WTO, which sectors do 'SPS measures' primarily relate to?
Answer: Food safety, animal health, and plant health. Question: Which of the following is a 'Tariff Barrier'?
(A) Quota (B) Licensing (C) Customs Duty (D) Technical Standards.
Answer: (C) Customs Duty.
Question: Which body conducts anti-dumping investigations in India?
Answer: Directorate General of Trade Remedies (DGTR), Ministry of Commerce and Industry.