CA Foundation · Business Economics · International Trade
Which of the following is an example of a non-tariff barrier to international trade?
An import quota fixing the maximum quantity of sugar imported in a year is a non-tariff barrier. It limits the physical volume of imports rather than taxing them, whereas specific, ad valorem and countervailing duties are all taxes and hence tariffs.
- AA specific duty of ₹50 per kg on imported almonds
- BAn ad valorem customs duty of 10% on imported watches
- CAn import quota fixing the maximum quantity of sugar that may be imported in a yearCorrect
- DA countervailing duty levied equal to the rate of tax on domestic goods
Explanation
A quota restricts the physical quantity of imports and is a classic non-tariff barrier. Specific duties and ad valorem duties are tariffs because they are taxes on imports. A duty that is a tax on imported goods remains a tariff even when set to match domestic taxes.
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