《Non-Tariff Barriers to Trade》.docx

PAGE 1  PAGE \* MERGEFORMAT 11 Non-Tariff Barriers Non-Tariff barriers to international trade are barriers other than tariffs. Several non-tariff barriers are described as follows: Export Subsidies A subsidy is a payment by government to a domestic producer. The subsidy is paid for by domestic taxpayers. Subsidies can (among other things) be tax breaks, cash loans, economic development incentives to attract investment to particular locales, government equity participation in a domestic enterprise, and below market or low interest rate loans. Subsidies help domestic producers compete more effectively against foreign producers in the home market, and enable domestic producers to export more than would otherwise be the case. They do this by reducing the cost of doing business. There is little agreement on what actually constitutes a subsidy. For example, did Canada subsidize fish exports when it gave fishermen grants to buy fishing trawlers? Did the United Kingdom subsidize steel when the government-owned steel company had severe losses? Export subsidies are attempts by governments to increase trade by paying companies to export. The U.S. Market Access Program (formerly the Market Promotion Program) is one example of an export subsidy. The following can be found on the U.S. Department of Agriculture Foreign Agriculture Service website: The Market Access Program (MAP), formerly the Market Promotion Program, uses funds from the U.S. Department of Agricultures (USDA) Commodity Credit Corporation (CCC) to help U.S. producers, exporters, private companies, and other trade organizations finance promotional activities for U.S. agricultural products. The MAP encourages the development, maintenance, and expansion of commercial export markets for agricultural commodities. Activities financed include consumer promotions, market research, technical assistance, and trade servicing. Another was the EU subsidy to European farmers for oilseed production that led