abhishreshthaa
Abhijeet S
OBJECTIVES/NEEDS/ADVANTAGES OF TRADE BARRIERS:
(1)To Protect Home Industries From Foreign Competition:
Tread barriers are imposed in order to give protection to home industries b avoiding completion from other countries. Such competition is harmful and may bring home industries in difficulties.
Government has to give support and protection to home industries and for such protection, imports must be discouraged or stopped. This is possible through the creation of different trade barriers and restricting imports.
(2)To Promote New Industries And R & D Activities:
The quality of production is also likely to improve through research and development (R&D) activities. Such R & D activities can be undertaken at the company’s level, at the industry level and even at the national level. It is type of industrial research activity conducted in the research laboratories.
R & D is a costly and time consuming activity and also requires the services of scientists/ exports. Quality improvement, cost reduction, introduction of new product, modification in the existing products and making existing products more useful and agreeable to consumers are some benefits of R & D activities.
(3)To Conserve Foreign Exchange Reserves:
A country has to pay for imports through its foreign exchange reserves. Large scale imports mean heavy pressure on available reserve of foreign currencies. Such polices will ultimately lead to foreign exchange crisis. On the other hand, foreign exchange will be saved through import substitution and import restriction.
(4)To Maintain Favourable Balance Of Trade & Payments Position:
Large scale imports lead to deficit in the balance of trade and balance of payments. Such deficit is undesirable and puts heavy strain on the available foreign exchange. For removing such deficit, imports should be restricted and exports should be promoted. Trade barriers are useful for reducing imports. They are advocated for reducing deficit in the balance of trade and payment position.
The term Balance Of Trade suggests the difference between exports and imports which may be positive/negative. It is positive when exports made are more than the imports. It is treated as negative when exports are less as compared to imports within a specific period normally one year. Poor and developing countries normally have to face the problems of negative balance of trade.
(5)To Protect National Economy From Dumping:
Foreign countries may try to capture domestic market by offering their goods at very low prices. The purpose is to sell surplus production. Such techniques of dumping is profitable to reach countries but harms poor countries. to avoid such situation (anti-dumping duties) are imposed. As a result, foreign goods become costly and the adverse effects on home markets is avoided.
(6) To Curb Conspicuous Consumption:
Domestic consumers may like to purchase costly imported goods for prestige purpose. This tenancy is a socially undesirable and can be checked by restricting the imports of luxury items by making them too costly and there by restricting their sale within the country.
(7) To mobilise Additional Revenue through Heavy Duties on Imports:
Trade barriers in the form of revenue tariffs are introduced. Such policy restricts imports and in addition gives substantial revenue to the government for various purposes. Here, trade barriers is created for collecting revenue from foreign suppliers. It is used as tool for collecting revenue.
(8)To make the country strong and self sufficient:
Trade barriers are useful for making the country strong & the self sufficient. Import restriction lead to production of new commodities within the country through import substitution. Dependence on other countries is reduced considerably. A domestic industry is made competitive in the long run.
(9) To counteract trade barriers imposed by other countries:
Sometime, trade barriers are introduced against the countries which have already imposed such restrictions. For example, country A may ban imports from country B. country B will adopt similar policy as a protest to the policy adopted by country A.
(10) To encourage the use of domestic production:
Trade barriers are introduced in order to encourage people to use goods manufactured with in the country. People will have no choice but to purchase domestic goods when imports are stopped or restricted considerably. Thus, trade barriers widen the scope of marketing to home industries and give them an opportunity to grow.
(1)To Protect Home Industries From Foreign Competition:
Tread barriers are imposed in order to give protection to home industries b avoiding completion from other countries. Such competition is harmful and may bring home industries in difficulties.
Government has to give support and protection to home industries and for such protection, imports must be discouraged or stopped. This is possible through the creation of different trade barriers and restricting imports.
(2)To Promote New Industries And R & D Activities:
The quality of production is also likely to improve through research and development (R&D) activities. Such R & D activities can be undertaken at the company’s level, at the industry level and even at the national level. It is type of industrial research activity conducted in the research laboratories.
R & D is a costly and time consuming activity and also requires the services of scientists/ exports. Quality improvement, cost reduction, introduction of new product, modification in the existing products and making existing products more useful and agreeable to consumers are some benefits of R & D activities.
(3)To Conserve Foreign Exchange Reserves:
A country has to pay for imports through its foreign exchange reserves. Large scale imports mean heavy pressure on available reserve of foreign currencies. Such polices will ultimately lead to foreign exchange crisis. On the other hand, foreign exchange will be saved through import substitution and import restriction.
(4)To Maintain Favourable Balance Of Trade & Payments Position:
Large scale imports lead to deficit in the balance of trade and balance of payments. Such deficit is undesirable and puts heavy strain on the available foreign exchange. For removing such deficit, imports should be restricted and exports should be promoted. Trade barriers are useful for reducing imports. They are advocated for reducing deficit in the balance of trade and payment position.
The term Balance Of Trade suggests the difference between exports and imports which may be positive/negative. It is positive when exports made are more than the imports. It is treated as negative when exports are less as compared to imports within a specific period normally one year. Poor and developing countries normally have to face the problems of negative balance of trade.
(5)To Protect National Economy From Dumping:
Foreign countries may try to capture domestic market by offering their goods at very low prices. The purpose is to sell surplus production. Such techniques of dumping is profitable to reach countries but harms poor countries. to avoid such situation (anti-dumping duties) are imposed. As a result, foreign goods become costly and the adverse effects on home markets is avoided.
(6) To Curb Conspicuous Consumption:
Domestic consumers may like to purchase costly imported goods for prestige purpose. This tenancy is a socially undesirable and can be checked by restricting the imports of luxury items by making them too costly and there by restricting their sale within the country.
(7) To mobilise Additional Revenue through Heavy Duties on Imports:
Trade barriers in the form of revenue tariffs are introduced. Such policy restricts imports and in addition gives substantial revenue to the government for various purposes. Here, trade barriers is created for collecting revenue from foreign suppliers. It is used as tool for collecting revenue.
(8)To make the country strong and self sufficient:
Trade barriers are useful for making the country strong & the self sufficient. Import restriction lead to production of new commodities within the country through import substitution. Dependence on other countries is reduced considerably. A domestic industry is made competitive in the long run.
(9) To counteract trade barriers imposed by other countries:
Sometime, trade barriers are introduced against the countries which have already imposed such restrictions. For example, country A may ban imports from country B. country B will adopt similar policy as a protest to the policy adopted by country A.
(10) To encourage the use of domestic production:
Trade barriers are introduced in order to encourage people to use goods manufactured with in the country. People will have no choice but to purchase domestic goods when imports are stopped or restricted considerably. Thus, trade barriers widen the scope of marketing to home industries and give them an opportunity to grow.