Nontariff barriers

Nontariff barriers (NTBs) are limits on trade other TARIFFs, including quotas, regulations, and technical requirements. While many countries claim to embrace FREE TRADE, most continue to use a variety of nontariff barriers to restrict the entry of imported goods and SERVICES. Quotas are limits on the quantity of a good that may be imported into a country. Immigration restrictions are a form of quotas, as are voluntary export restraints. Each year the United States limits the number of immigrants from different regions of the world. In the 1980s, fearing the imposition of quotas or tariffs, Japan coordinated a “voluntary” export limit of automobiles into the United States. U.S. political leaders had pressured the Japanese government into the quota, hoping to protect American auto-industry jobs. Facing increased DEMAND in the United States along with restricted supply, car dealers simply raised prices. Regulations are another form of NTB. For decades U.S. exporters to Japan have complained about Japanese regulatory requirements and tedious inspection demands as a form of trade barrier. Limits on the size of retail stores and distribution systems that are difficult to access are also forms of nontariff barriers. Developing countries claim labor and environmental standards imposed by industrialized countries impose nontariff barriers. Eco-labeling requirements in the EUROPEAN UNION have been challenged as a barrier to trade. The International Organization for Standardization’s ISO 9000 quality standards and ISO 14000 environmental-management standards limit entry to those companies that can afford to meet ISO STANDARDS. Critics suggest this effectively limits COMPETITION and is a nontariff barrier. In addition, health and safety concerns are often used to justify barring imports; in the 1990s, the EUROPEAN UNION challenged U.S. dairy products containing bovine growth hormones. U.S. health and safety laws also restrict entry into the country. In 2001, Mexican trucks were still restricted from transporting goods into the U.S. beyond a limited border area even though access was permitted in the NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA). Safety concerns were stated as the U.S. justification to ignore that provision of the agreement. In addition to reducing tariffs, the WORLD TRADE ORGANIZATION attempts to reduce nontariff barriers through greater HARMONIZATION of global trade rules.
See also TRADE BARRIERS.