Chapter 5: Trade Restrictions: Non-Tariff Barriers
Chapter 5 Introduction
Learning Objectives
After reading this chapter, you should be able to
- Describe various types of non-tariff barriers: import quotas, voluntary export restraints, and other non-tariff trade barriers.
- Compare an import tariff with an import quota in terms of their effects on economic well-being, producer and consumer surplus, and government revenue.
- Explain the terms-of-trade effect of an import quota and the potential for a nationally optimal quota.
- Compare the effects of an import quota and those of a voluntary export restraint.
- Describe selected other non-tariff barriers and their economic effects.
Think About It!
Video: Title
Before reading this chapter, watch this video outlining the basic concept of an import quota.
Source: Iris Franz. (2018, September 4). Import quota. [Video]. YouTube. https://www.youtube.com/watch?v=xJpqFiCCtaw
Reflection Questions
Before we begin, we encourage you to reflect on the following questions:
- How does an import quota affect the price of the imported good on the domestic market?
- What impact do you think the import quota will have on domestic producers of the imported good?
- What impact do you think the import quota will have on domestic consumers?
- Does the import quota benefit the nation that imposes it? If not, why do nations impose import quotas?
Introduction
In this chapter, we will see that import quotas and other non-tariff barriers affect the economic well-being of a nation as well as of different groups within the economy. Import quotas and other non-tariff barriers can also affect the economic well-being of the world. We will evaluate which groups benefit and which groups lose from an import quota and examine its effect on a small country, a large country, and the world. We will also consider the impacts on the well-being of other non-tariff barriers.
