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Simple English definitions for legal terms
nontariff barrier
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A quick definition of nontariff barrier:
A nontariff barrier is a rule or law that a country puts in place to limit the amount of goods that can be imported or exported. It is different from a tariff, which is a tax on imported or exported goods. Nontariff barriers can include things like quotas, regulations, and licensing requirements. These barriers can make it harder for businesses to trade with other countries and can limit the choices available to consumers.
A more thorough explanation:
Definition: A nontariff barrier is a policy implemented by a government that restricts international trade without using tariffs. This can include regulations, quotas, and other measures that limit imports or exports.
Examples:
- Import quotas: A government may limit the amount of a certain product that can be imported into the country each year. For example, a country may only allow 100,000 cars to be imported annually.
- Technical regulations: A government may require certain technical standards for imported products, making it difficult for foreign companies to comply. For example, a country may require all imported electronics to meet specific safety standards.
- Subsidies: A government may provide financial assistance to domestic companies, giving them an unfair advantage over foreign competitors. For example, a country may offer tax breaks to local farmers, making it difficult for foreign farmers to compete.
These examples illustrate how nontariff barriers can be used to restrict international trade. By implementing policies that limit imports or exports, governments can protect domestic industries and promote economic growth. However, these barriers can also lead to higher prices for consumers and reduced competition in the marketplace.