In a short essay, list and discuss the nontariff barriers that relate to direct price influences: subsidies, aid and loans, customs valuations, and other direct price influences.
Answer:
a. Subsidies: Countries sometimes make direct payments (called subsidies) to domestic companies to reduce their costs or compensate them for losses incurred from selling abroad.
b. Aid and loans: Governments also give aid and loans to other countries. If the recipient is required to spend the funds in the donor country, some products can compete abroad that might otherwise be noncompetitive.
c. Customs valuation: Most countries have agreed on a procedure for assessing values when their customs agents levy tariffs, but customs must ascertain whether the invoice correctly identifies the product, its price, and its origin.
d. Other direct price influences: Countries frequently use other means to affect prices, including special fees, requirements that customs deposits be placed in advance of shipment, and minimum price levels at which goods can be sold after they have customs clearance.