Trade

I do not see benefits in this large number of trade barriers and I am scared thinking about the list of restrictions I am going to deal with wile exporting from EU to the USA. I am a small manufacturer from South Africa and it is almost impossible to build strong B2B with some American partners because of these endless lists of tariffs I have to pay while shipping my products abroad. I agree with all the international economists – trade barriers influence badly both SMEs and the country’s economy in general. One main reason for this consensus is that trade barriers decrease overall efficiency and productivity within economies that are affected by them. This can be explained by the theory of comparative advantage. In theory, trade is free, and involves the removal of all such barriers, except those considered necessary for health or national security. In practice, however, even those countries promoting free trade heavily subsidize certain industries, such as agriculture and steel. At the same time, some trade barriers might be in place within a free trade agreement to protect consumers from inferior, harmful, or dangerous products. In that case, they may not be as harmful to a country’s economy but absolutely destroy the SMEs potential. So, this is a double-edged sword."

Trade Barriers are obstacles for trade. These are measures that make trade more difficult or less attractive, and thus discourage trade. For example, some of the trade barriers are: 1. Import duties (they increase the price of imported goods, and thus make the import less attractive) 2. Inefficient border controls cause a delay (in clearing goods) at the border, which in turn causes disruptions to the supply chains of companies that rely on the goods. 3. Administrative procedures for import/export, e.g. the need to submit paper-based documents, the need to provide the border control authorities extra information, the need to translate documents for the authorities. All these extra efforts by the exporter/importer cost time and money, and hence they make trade less attractive. 4. Complex IT requirements: if exporters and importers are required to submit data to multiple government agencies, they entail extra IT costs. Also, these costs become “costs of trade”, making trade less attractive.