Article | International Economies

Running head: INTERNATIONAL ECONOMIES
International
Economies
10/2/2019

INTERNATIONAL ECONOMIES 1
Trade Barriers
The aim of this paper is to present a review of the trade barriers and why countries
impose trade barriers. Besides this, the paper is comprised of a brief analysis of identifying
the effect of the trade barriers on the trade balance, economic growth, and employment. In the
end, the paper is highlighting the trade barriers of a selected country and the arguments for
and against erecting trade barriers in the chosen country.
Trade barriers are the restrictions that are induced by the government over
international trade. Economists have normally agreed that the trade barriers are harmful and
reduce the overall economic efficiency; that could be understood with the application of the
comparative advantage theory. Almost every trade barrier operates under the same principle:
the imposition of cost (it can be in terms of time, quota, money, bureaucracy) on the trade
results in increasing the price or accessibility of the product that is being traded (New
Zealand Government, 2019). If two or more countries recurrently make use of the trade
barriers while trading products with each other, then it results in the trade war. When barriers
take the form of tariffs (that levy a financial burden on the imports) and non-tariff barriers to
trade (that makes use of other overt and concealed means to restrict imports and rarely
exports too). In this theory, free trade is comprised of elimination of such barriers, excluding
those that are considered to be important for the security of the nation and the health of the
citizens. In practice, even those nations are highlighting and making use of free trade severely
subsidizes a few of the industries, like steel and agriculture.
Nations with high income inclined to hold limited trade barriers in comparison to
nations with middle income, but in comparison to the low-income nation the trade barriers
are low. Small states inclined to have low barriers to trade in comparison to large states. The

INTERNATIONAL ECONOMIES 2
general type of trade barrier is agricultural products. Footwear, apparel, and textiles are those
products that are mostly endangered by the trade barriers. As per the statement presented by
Chad Bown and Meredith Crowley, trade across the world is "probably" massively liberal in
the present era in comparison to earlier trade (Jacks, Meissner & Novy, 2011). As per Ronald
Findlay and Kevin H. O’Rourke, the transport cost and trade barriers were very essential
trade barriers in the nineteenth and twentieth centuries. They also revealed that in the
mercantilist era price gaps used to arise because of the trade monopolies, wars, and pirates as
to the cost of transport and tariffs, which are easily measurable (Jacks, Meissner & Novy,
2010).
The discussions related to international trade are irresistible. There is not country
large or rich that produces everything that it requires or owns every resource for its
manufacturing industries. International trade has allowed them to purchase those products
that are not available in the home region. The small nations take benefit from international
trade in comparison to the larger nation. International trade has allowed nations to get access
to the things or products which they are incapable to manufacture or create. In spite of some
of the obvious advantages countries are imposed some of the restrictions which pursue to
control imports (Fontagné, Orefice, Piermartini & Rocha, 2015). These restrictions are
imposed through tariffs, quotas, non-tariff barriers or open prohibitions. The reasons for these
restrictions are as follows:
Job protection – Free trade can allow the country's citizens to involve getting the
cheap products of each other. But, it has been realized that this is increasing the competition
for their local industries since they are unable to vend all those products that they
manufacture.