Trade Barriers

ByAnkit Gothi(107)
Manan Jain(124)
Parin Maru(136)
PGDM-B

WTO Agreements
Agreement

on Technical Barriers to Trade

(TBT)
relates to trade restrictive effect arising from the
application of technical regulations or standards such
as testing requirements, labelling requirements,
packaging requirements, marketing standards,
certification requirements

Agreement

on Sanitary and Phytosanitary

Measures (SPS)
Agreement covers all measures which aim to protect (i)
human or animal health from food-borne risks arising
from additives, contaminants, toxins or disease causing
organisms in their food; (ii) human health from animalor plant-borne diseases; and (iii) animals and plants
from pests, diseases or disease-causing organisms.

Trade Barriers: Japan

High Tariffs on Imports
Beef, Citrus, Dairy, Processed Food Products & Rice
These high tariffs generally apply to food products where
Japan has domestic production to restrict imports.
Wheat Import System
Wheat is imported through MAFF's Food Department, which
then resells the wheat to Japanese flour millers at prices
substantially above import prices.
These high prices discourage wheat consumption by
increasing the cost of wheat based foods in Japan.
Wood Products and Building Materials
Japan continues to restrict imports of certain manufactured
wood products through tariff escalation (i.e. progressively
higher tariffs based on the level of processing of the wood
product).

Trade Barriers: Japan

Transparency
Transparency issues remain a top concern of companies
operating in Japans market
Health IT
Cloud Computing
IT and Electronic Commerce Policymaking
Insufficient transparency in Japans policymaking process for
all above has stifled innovation and competitiveness in Japan
and constrained company access.
Legal Services
Japan imposes restrictions on the ability of foreign lawyers to
provide international legal services in Japan in an efficient
manner.

Trade Barriers: Japan

Investment Barriers
Despite being the world's third largest economy,
Japan
continues to have the lowest inward foreign direct investment
(FDI) as a proportion of total output.
Reasons include:
Attitudes toward outside investors;
Inadequate corporate governance mechanisms and a
relative lack of financial transparency and disclosure.
Automobiles and Automobile Parts
A variety of nontariff barriers have traditionally impeded access
to Japans automobile and automotive parts market.
For example, U.S. automakers seeking to introduce, for testing
and demonstration purposes, automobiles using new
technology (i.e., fuel cell vehicles) have faced a lack of
transparency and other barriers to certifying these new
products in a timely and efficient manner.

Trade Barriers: China

Tariffs and Other Import Charges
China still maintains high duties on some products that
compete with sensitive domestic industries.
For example,
The tariff on large motorcycles is 30 percent
Raisin imports face duties of 35 percent
China reserves a portion of the in-quota imports for state
trading enterprises, while it makes the remaining portion
(ranging from 10 percent to 90 percent, depending on the
commodity) available for importation through non-state
traders.
Tariff Classification

Chinese customs officers have wide discretion in

classifying a particular import into any tariff categories.

Trade Barriers: China

Export Quotas, Duties and Licenses
China maintains export quotas and sometimes export duties
on antimony, bauxite, coke, fluorspar, indium etc. to help the
development of downstream industries.
Land Issues
Chinas constitution specifies that all land is owned in
common by all the people.
The State and collectives can either grant or allocate
land-use rights to enterprises in return for the payment of
fees, or in some cases without the payment of any fees. The
time limit for land-use rights acquired by foreign investors for
both industrial and commercial enterprises is 50 years.

Trade Barriers: China

Intellectual Property Rights (IPR) Protection
Persistent inadequacies in the protection and enforcement of
IPR represent barriers to other countries exports and
investment.
For example:
Retail and wholesale counterfeiting
End-user piracy of business software and copyright piracy
over the Internet.
Regulations
Set high thresholds for entry into service sectors such as
banking, insurance and telecommunications.
For example: Foreign life insurance companies can only be
established as joint ventures, with foreign equity capped at 50
percent.
Construction, Engineering, Architectural and
Contracting Services
High minimum registered capital requirement
Limited scope of projects that can be undertaken by

Trade Barriers: US
100% scanning
Aims to enhance security by countering potential terrorist
threats to the international maritime container trade system,
foresees the 100% scanning of all US-bound containers
Tariff Barriers
Despite the substantial tariff reduction and elimination, the
U.S. retains a number of significant duties and tariff peaks in
various sectors including food products, textiles, footwear,
leather goods, ceramics, glass, and railway cars.
Import Duties
Additional customs impediments, such as import user fees
and
excessive invoicing requirements on importers, which add to
costs in a similar way to tariffs.
The most significant user fee is the Merchandise Processing
Fee, which is levied on all imported merchandise except for
products from the least developed countries

Trade Barriers: US
Public Procurement
In the field of public procurement, the main U.S. trade barriers
are contained in a wide array of clauses in federal, state and
local legislation and regulation giving preference to domestic
suppliers or products,
Foreign Direct Investment Limitations
The Foreign Investment and National Security Act (FINSA)
restrains foreign investment in (or ownership of) businesses
relating to national security.
U.S. restrictions on foreign investment are particularly evident
in the shipping, energy , communications and
telecommunication sectors.
Tax Discrimination
Several aspects of U.S. taxation practices constitute
additional difficulties to foreign investment in the U.S. market.
These are mainly related to the nature of reporting

Trade Barriers in India for EU

European

Union
Viability of an FTA
Negotiations in June 2007 and, so far, eleven
negotiating rounds have been held. The last
EU-India Summit took place on 10 December
2010 in Brussels.
Burdensome licensing requirements
The provisions stipulate prior security clearance
and technology transfer requirements, as well
as an obligation to substitute foreign engineers
with Indian ones in telecommunication industry.
India restricting exports of cotton

Trade Barriers in India for EU

contd.
Standards

,Testing, Labeling and

Certification
In 2009, the GOI revised its mandatory
certification compliance list, which
now includes 85 specific commodities
like gas cylinders, dry cell batteries.
Products on the mandatory
certification list must be certified for
safety by the Bureau of Indian
Standards (BIS) before the products
are allowed to enter the country.

Trade Barriers in India for

US
Import

Licensing
Banned Items( Oils from Animal origin)
Items Requiring License (Chemicals)
Canalized items (Petroleum products)
Customs Procedures
Motor vehicles may be imported through
only three specific ports and only from the
country of manufacture.
Sanitary and Phytosanitary (SPS) Measures
Export Subsidies
Intellectual Property Rights(IPR) Protection
US retained India on the "Priority Watch
List"

Service Barriers
Banking

a direct branch,
a wholly-owned subsidiary,
or through a stake in a private Indian bank.
Audiovisual

and Communications Services

experience difficulty in importing film/video publicity

Accounting

professional accountants should be graduates from India.

Foreign accounting firms can practice if their home country
provides reciprocity to Indian firms
Construction,

Architecture, and Engineering

offered only on a nonconvertible rupee payment basis

Distribution

Retail sector

Services

Trade Barriers in India for

Pakistan
Need

for a better mobile connectivity

to improve communication for
business and trade
Relay of television channels
Opening up of bank branches on
reciprocal basis
Pakistan would switch over to negative
list of items for trade with India rather
granting MFN status

Trade Barriers in India for

Bangladesh
In

Sept 2011, India announced to

remove 46 textiles lines, of interest to
Bangladesh, from India's negative list
for the least developed countries
under the South Asia Free Trade Area
Agreement (SAFTA).

General Investment Barriers

Equity

Restrictions
The government continues to prohibit or
severely restrict FDI in certain politically
sensitive sectors, such as agriculture, retail
trading, railways, and real estate.
Investment Disputes
Indias poor track record to date in
honoring and enforcing agreements with
investors in the energy sector has
discouraged further investment in this
important sector.

FTA partners of India

India

has signed FTAs or similar

bilateral agreements with a number of
countries including Sri Lanka,Thailand,
Singapore, South Korea and Chile, as
well as the Mercosur countries
(Argentina, Paraguay, Uruguay and
Brazil), ASEAN and the South Asian
Association for Regional Cooperation
(SAARC).

Global Enabling Trade Report

The

Enabling Trade Index measures

the factors, policies and services that
facilitate the trade in goods across
borders and to destination. It is made
up of four sub-indexes:
Market access
Border administration
Transport and communications
infrastructure
Business environment

Open For Feed back