Barriers to International Trade
There are a variety of barriers to international trade. Many are man-made to serve economic interests such as protecting the economies of respective countries. Others arise out of various challenges faced by international trade participants.
Man-made barriers to trade can include tariffs & duties, import/export licenses, quotas, subsidies, voluntary export restraints, embargos, currency devaluation and trade restrictions. These barriers can arise out of a number of circumstances such as trade relations between countries, the need to protect local industries or to discourage or encourage imports or exports to defend a nation’s economy.
When engaging in international business, ethical barriers arise as consumers and governments are now more sensitive to issues such as outsourcing, working conditions, diversity, equality, child labour, human rights, politics, environmental issues and overall trust and integrity. Issues in some economies such as bribery and corruption can also act as a major barrier for larger, more respectable entrants into such markets.
Differing cultural norms can pose various challenges for international trade. A great example of this is language, which can act as a simple but formidable barrier for new entrants. Others include religious holidays along with cultural events, customs, restrictions and laws that may not permit the efficient running of businesses in some or all localities, some or all of the time. Many of these barriers do, however, become less relevant with increased sensitization and involvement in a particular market
Many more-advanced markets have access to better technology and use it to implement higher trade standards and other related measures and regulations, intended to benefit their populations. These can often present huge challenges to participants from less technologically advanced emerging markets. Many markets will also demand goods made to certain specifications that require specialized technologies to produce, which less developed countries may not have access to.
Sometimes, geography and other natural factors make efficient logistics impractical or impossible. This can then become a huge trade barrier for those living in such areas or those who may want a specific product or service available only in such areas.