1. McGraw-Hill/Irwin Copyright  2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 9: Nontariff Barriers to Imports

2. McGraw-Hill/Irwin Copyright  2009 by The McGraw-Hill Companies, Inc. All rights reserved. 9.1 Introduction  Chapter Objective To examine the major kinds of nontariff barriers and their effects.

3. 9-3  Contents Import Quotas Import Quotas Voluntary Export Restraints Voluntary Export Restraints Product Standards Product Standards Domestic Content Requirements Domestic Content Requirements Government Procurement Government Procurement Measurement of Costs of Protection Measurement of Costs of Protection

4. 9-4  Import quota 进口配额 进口配额  Tariff-rate quota 关税配额 关税配额  Global quota 全球配额 全球配额  Country-specific quota 国别配额 国别配额 9.2 Import Quota 配额

5. 9-5  Effects of a quota in a Small Country O Y 1 Y 3 Y 2 Y 0 Y PYPY P1P1 P0P0 SdSd S d +q a c b d SWSW quota C: quota rents DdDd

6. 9-6  Importers Fixed Favoritism Free assignment of quotas to importers on the basis of past performance Net welfare effect: - ( b+d ) Who gets the quota rents?

7. 9-7  Government Public Auction Public Auction  Auction “under the table” Net welfare effect: - ( b+d ) Who gets the quota rents?

8. 9-8  Importers (partly) Resource-using Procedures Resource-using Procedures  First come, first serve  Demonstrating need or worthiness  Negotiation Net welfare effect: - ( b+d+c ) ? Net welfare effect: - ( b+d+c ) ? Who gets the quota rents?

9. 9-9 O Y 1 Y 3 Y 2 Y 0 Y PYPY P2P2 P0P0 P1P1 a b c d DdDd SdSd SWSW e  Effects of a Quota in a Large Country S d +q q Optimal Quota

10. 9-10 Net welfare effect for a large country: e - ( b+d ) Nationally Optimal Quota

11. 9-11 Welfare Loss for the World: （ｂ＋ｄ）＋ｆ

12. 9-12  Comparison of Tariffs and Quotas  Equivalence of tariffs and quotas  Differences Tariff Revenue vs. Quota Rents Protective effects Damaging effects on the economy (Monopoly and Efficiency)

13. 9-13 9.3 Voluntary Export Restraints 自愿出口限制  Are VERs voluntary ?  History 1981: Japanese VER on car exports 1981: Japanese VER on car exports to the USA, 1.8 million per year to the USA, 1.8 million per year  Multilateral Discipline According to the Agreement on According to the Agreement on Safeguards, VERs shall be phased Safeguards, VERs shall be phased out by 1999. out by 1999.

14. 9-14  Effects of VERs  Similar to those of Quotas  Quota rents to be captured by the exporting firms or their government.

15. 9-15 Effects of VERs in a Small Country Effects of VERs in a Small Country O Y 1 Y 3 Y 2 Y 0 Y PYPY P1P1 P0P0 SdSd S d +q a c b d SWSW VER quota Export Price DdDd

16. 9-16 Effects of VERs  Total losses for the importing country: b+c+d  Worse than quotas

17. 9-17 Effects of U.S. Auto VER  Loss in consumer surplus: USD 13 billion  Net national loss: USD 3 billion

18. 9-18 Other Effects of VERs  Quality Upgrading  Foreign Direct Investments

19. 9-19 9.4 Product Standards 产品标准 Technical Barriers to Trade 技术贸易壁垒 TBT  Standards  Certification

20. 9-20 9.5 Domestic-Content Requirements 当地成分要求 China: Imports of Car Parts Tariff: car 25% car parts 10%  Mixing Requirement

21. 9-21 9.6 Government Procurement 政府采购 Buy American Act 1933  6% margin preference for US goods  50% for military goods WTO : 1979; 1994 Government Procurement Agreement Plurilateral agreement.

22. 9-22 9.7 Measurement of Costs of Protection  Costs as a Percentage of GDP The case of a small country

23. 9-23 Net national loss / GDP = 1/2 X Tariff rate X Percent reduction in import quantity X Import value / GDP

24. 9-24 Example  Import tariff : 10%  Import quantities reduced: 20%  Imports / GDP: 20%  Net national loss / GDP = 0.2%

25. 9-25 China (2005)  Import tariff : 9.9%  Import quantities reduced: 20%  Imports / GDP: 660/2251(bln)= 29%  Net national loss / GDP = 0.29%  Net national loss: RMB 52.9 bln

26. 9-26 Actual costs may be higher Foreign retaliation Foreign retaliation Enforcement costs Enforcement costs Rent-seeking costs Rent-seeking costs Rents to foreign producers (VER) Rents to foreign producers (VER) Innovation Innovation

27. 9-27

28. 9-28  Reducing protection: The role of GATT/WTO  General Agreement on Tariffs and Trade (GATT) 1947  Tokyo Round 1973-1979  Uruguay Round 1986-1993  Doha Round 2001-

29. 9-29  Section 301 (1974) Unfair trade  Super 301 (1988) Trade Barriers  Special 301 (1998) Intellectual Property Rights Watch List; Priority Watch List  U.S. Unilateral Action

30. 9-30 Special 301 Priority Watch List 2004 ARGENTINA KUWAIT BAHAMAS LEBANON BRAZIL PAKISTAN EGYPT THE PHILIPPINES EUROPEAN UNION INDIA RUSSIA INDONESIA TAIWAN KOREA TURKEY

31. 9-31 重点观察名单 2010 中国、俄罗斯、阿尔及利亚、 阿根廷、加拿大、智利、印度、 印尼、巴基斯坦、泰国、委内 瑞拉 中国、俄罗斯、阿尔及利亚、 阿根廷、加拿大、智利、印度、 印尼、巴基斯坦、泰国、委内 瑞拉

32. 9-32 Summary

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