Chapter 21: Problem 33

What is the general trend of trade barriers over recent decades: higher, lower, or about the same?

Short Answer

Expert verified

In recent decades, the general trend of trade barriers has been lower. This is due to the decrease in tariff barriers, facilitated by free trade agreements and the efforts of the World Trade Organization (WTO). While non-tariff barriers have become more prevalent, international organizations are working to reduce them, promoting increased international trade and economic growth.

Step by step solution

Introduction to Trade Barriers

Trade barriers refer to government-imposed limitations on the exchange of goods and services across international borders. They can be categorized into two main types: tariff barriers and non-tariff barriers. Tariff barriers are taxes or duties levied on imported goods to protect domestic industries, while non-tariff barriers consist of restrictions such as import quotas, regulations, and licensing requirements.

Tariff Barriers Over Recent Decades

Over recent decades, there has been a general trend of decreasing tariff barriers worldwide. One reason for this is the increasing number of free trade agreements among countries, which facilitate trade by lowering or eliminating tariffs. Additionally, the World Trade Organization (WTO) serves to negotiate lower tariffs and promote free trade among its member countries. Since the establishment of the WTO in 1995, average global tariffs have significantly decreased, contributing to a decline in tariff barriers.

Non-Tariff Barriers Over Recent Decades

While tariff barriers have been reduced in recent decades, non-tariff barriers have become more prevalent. Countries may impose new regulations, licensing requirements, or even import quotas as a way to protect domestic industries without directly using tariffs. In some instances, these non-tariff barriers can be more restrictive and harder to quantify in comparison to tariffs. However, the WTO and other international organizations have been working to address and reduce such non-tariff barriers, as they can distort trade and hinder economic growth.

Conclusion

In conclusion, the general trend of trade barriers over recent decades is that they have become lower. Tariff barriers have decreased significantly due to free trade agreements and the efforts of organizations like the WTO, while non-tariff barriers have become more prevalent but have also been targeted for reduction. Overall, the global movement toward free trade and economic integration has contributed to a reduction in trade barriers, promoting increased international trade and economic growth.

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