Global Economy Essay Example | Topics and Well Written Essays - 2000 words

Global Economy - Essay Example Economy such as economic reasons behind implementing various forms non- tariff trade protection and the structural pattern of Chinese outward Foreign Direct Investment (FDI) will be answered. Trade barriers are the measures appointed by governments and other public authorities for the purpose of making the imported goods and services less competitive as compared to locally produced goods. Tariff is a form of trade barrier that is imposed to restrict international trade import and export activities lead to increase in the price level for consumers. In contrast, Non tariff barriers are imposed in order to control imports. The main hypothetical reason behind shifting from tariff to non-tariff protection measures is to protect the concern of developing countries, aid them to acquire funds for the purpose of running such economies and to support their weak industries to flourish (Kerr and Gaisford, 2007). Mainly six types of non tariff protections processes can be experienced in a global economy. Most important among these is specific limitation on trade such as import licensing requirement, fees, embargos, fixed proportionate restriction on foreign domestic goods and minimum import price limits. Customs and administrative entry procedures also outline non tariff trade protection methods through the ways of anti-dumping practices, tariff classifications and strict documentation and valuation systems. Intergovernmental acceptance instruments for testing methods, standards, packaging, labelling and marking, government participation in international trade by the means of procurement policies, export subsidies, countervailing duties and domestic assistance programs are the other form of non tariff trade protections. Apart from all these, government imposes specific charges on imports prior to the importation takes place and other fees such as special supplementary duties, import credit d iscrimination, variable levies and border taxes represents various forms of non