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A trade barrier is a general term that describes any government policy or regulation that restricts international trade. The barriers can take many forms, including the following terms that include many restrictions in international trade within multiple countries that import and export any items of trade.

• Import duties
• Import licenses
• Export licenses
• Import quotas
• Tariffs
• Subsidies
• Non-tariff barriers to trade
• Voluntary Export Restraints
• Local Content Requirements
• Embargo

Most trade barriers work on the same principle: the imposition of some sort of cost on trade that raises the price of the traded products. If two or more nations repeatedly use trade barriers against each other, then a trade war results.

Economists generally agree that trade barriers are detrimental and decrease overall economic efficiency, this can be explained by the theory of comparative advantage. In theory, free trade involves the removal of all such barriers, except perhaps 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.

Examples of free trade areas

• North American Free Trade Agreement (NAFTA)
• South Asia Free Trade Agreement(SAFTA)
• European Free Trade Association
• European Union (EU)
• Union of South American Nations

Other trade barriers include differences in culture, customs, traditions, laws, language and currency.

See also

• Copenhagen Consensus
• Customs union
• Agricultural policy

v • d • e International trade Definitions Balance of payments · Current account (Balance of trade) · Capital account · Foreign exchange reserves · Net Capital Outflow · Comparative advantage · Absolute advantage · Import substitution industrialization · International trade Organizations and policies World Trade Organization · International Monetary Fund · World Bank Group · International Trade Centre · Trade bloc · Free trade zone · Trade barrier Schools of thought Free trade · Balanced trade · Mercantilism · Protectionism Related issues Globalization · Outsourcing · Trade justice · Fair trade Customs unions CACM · CAN · CARICOM · CEMAC · EAC · EAEC · EU · GCC · Mercosur · SACU · WAEMU

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• This page was last modified on 23 December 2008, at 01:57.

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