Agreements on Trade Barriers Coursework Example | Topics and Well Written Essays - 1000 words

Agreements on Trade Barriers - Coursework Example The most common way of limiting the number of imports into a country is to increase the taxes levied on imports. These taxes are increased by the government with the aim to ensure that the demand for local goods is promoted and the demand for international goods is decreased. When taxes on imports are increased, the cost of imported goods increases thus the domestic consumers find the locally produced goods cheaper which in turn aids local producers. One example of tariffs is the Tariff Act of 1930, this act was put into action to decrease imports and increase consumption of locally produced goods and services as the US was experiencing the Great Depression during that time (ILIAS, 2008, p.2). Tariffs are even levied on exports to limit the outflow of resources as well as locally produced goods, but these tariffs have mostly hurt local businesses due to which they are quite rarely applied. Another policy that has been put into a position to reduce the imports of goods and services is restricting the number of particular goods and services being imported. When the number of goods being imported into a country is restricted, the imported good becomes short and the prices of these goods increase locally due to which domestic consumers see locally produced items as a favorable option. For example: during the era f 2010, Mexico restricted the amount of sugar being imported into the country to two hundred and fifty tons (SCHMITZ, 2005, p.212).The above-stated trade barriers are direct trade barriers levied by a country on imports and exports of goods and services. Countries even use indirect means to restrict the import of international goods and services. These restrictions are levied in face of standards of goods and services being imported by a country. For example, the US has restricted imports of those goods and services in which child labor is involved. Due to this, those countries that use child labor to produce goods and services can not export their goods an d services to the US. The first world countries have a practice of dumping their old products or used products in third world countries at cheaper prices, due to which the locals of third world countries find these goods more favorable and they heavily import used products. The governments of third world countries have applied restrictions in form of quotas and tariffs to reduce the import of such goods and services to save their local businesses. Governments provide a subsidy to local producers of those goods and services that are being heavily imported. This is done to decrease the cost of locally produced goods and services to make local goods and services much favorable than imported ones.