Outline, using examples, the barriers to free trade used by some countries - Leaving Cert Business - Question 3(A) - 2021
Question 3(A)
Outline, using examples, the barriers to free trade used by some countries.
China and 14 Asia-Pacific countries agreed a historic free trade deal in November 2020.
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Worked Solution & Example Answer:Outline, using examples, the barriers to free trade used by some countries - Leaving Cert Business - Question 3(A) - 2021
Step 1
Quota:
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Answer
A quota is a physical restriction on the number of units of a good that may be imported or exported. This mainly serves to discourage imports and encourage the sale of domestically produced goods.
Example: The European Union (EU) has placed a quota on the amount of clothes that can be imported into the EU from China.
Step 2
Tariff:
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A tariff is a tax on the value or price of goods imported. Hence, this makes imports more expensive, reducing their competitiveness in the domestic market.
Example: A tax, duty, or tariff imposed on New Zealand beef can limit its access to foreign markets.
Step 3
Embargo:
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An embargo serves as a total ban on the import of goods from a particular country, often for political reasons.
Example: The American government has enforced a blanket embargo on the import of UK beef due to concerns over Bovine Spongiform Encephalopathy (BSE).
Step 4
Subsidies:
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Subsidies are financial aids provided by national governments to local industries to aid them in day-to-day operations, granting them a competitive edge.
Example: The EU has subsidised agriculture and aircraft manufacturing to protect them from non-EU competition.
Step 5
Administrative regulations:
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Answer
These regulations entail administrative processes designed to exclude imports.
Example: Customs delays and required paperwork can effectively discourage foreign goods from entering a domestic market.
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