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Session 9

Session 9. Non-tariff Barriers to Imports. The Effect of an Import Quota under Competitive Condition (Small Importing Country). Quota will increase the supply . Sd + Qq. World Price. Domestic price with quota. Domestic supply increased by quota. Domestic demand decreased by quota.

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Session 9

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  1. Session 9 Non-tariff Barriers to Imports

  2. The Effect of an Import Quota underCompetitive Condition (Small Importing Country) Quota will increase the supply Sd +Qq World Price Domestic price with quota Domestic supply increased by quota Domestic demand decreased by quota Quota Import with free trade

  3. Gainers and Looser • Depends on how a nation allocate quota Sd +Qq World Price Domestic price with quota Extended Effect of an Import Quota Increased Producer Surplus Decreased Consumer Surplus Deadweight Loss

  4. Ways to Allocate Import Licenses 1.Fixed Favoritism The government simply assigns the licenses to firms (and/or individual) without competition, application or negotiation. The importers can take an advantage by resellingthe imports at the higher domestic price. Sd +Qq

  5. 2.Auction The government sell import to licenses on a competitive to the highest bidders. Sd +Qq The importer and the governmenttake the advantage from the import quota.

  6. The importer take the advantage from the import quota. The government take the advantage from the import quota.

  7. 3.Resource-using Procedures The government sell import to licenses to the importer(s) on the basis of demonstrating need or worthiness; or on the basis of negotiation. The selected importer take the advantage from the import quota.

  8. When the License Also Charged The importer take the advantage from the import quota. The government take the advantage from the import quota.

  9. When the Bribe Play Role With bribe, the importer take the advantage from the import quota. Bribe ( go to individual)

  10. The Effect of an Import Quota underCompetitive Condition (Large Importing Country) Sd +Qq Quota will increase the supply Domestic Price with quota policy Initial World Price World Price with quota policy Extended Effect of an Import Quota Increased Producer Surplus Deadweight Loss Decreased Consumer Surplus Quota

  11. Gainer and Looser 1.Fixed Favoritism 2.Auction 3.Resource-using Procedures

  12. Other Non-tariff Barriers 1. Voluntary Export Restraints (VERs)

  13. 2. Product Standards  Genetically Modified Organism

  14. 3. Domestic Content Requirements

  15. 4. Government Procurement

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