List and define the types of nontariff barriers that limit the quantity of goods traded: quotas, embargoes, buy local legislation, standards and labels, specific permission requirements, administrative delays, and reciprocal requirements.
Answer:
a. Quotas: The most common type of import or export restriction based on quantity is the quota. From the standpoint of imports, a quota most frequently limits the quantity of a product allowed to be imported in a given year. The amount frequently reflects a guarantee that domestic producers will have access to a certain percentage of the domestic market in that year.
b. Embargoes: An embargo is a specific type of quota that prohibits all trade on a whole category of products or on all products from a given country. Governments use embargoes in an attempt to use economic means to achieve political goals.
c. "Buy Local" legislation: Another form of quantitative trade control is "buy local" legislation. If government purchases are a large part of total expenditures within a country, they comprise an important part of the market. Most governments favor domestic producers in their purchases of goods. Sometimes they specify a content restriction—in which a certain percentage of the product is of local origin.
d. Standards and labels: Countries commonly have set classification, labeling, and testing standards in a manner that allows the sales of domestic products but inhibits that of foreign-made ones. The purpose of testing standards is to protect the safety or health of the domestic population. However, there have been situations where exporters have argued that such restrictions protect domestic producers instead.
e. Specific permission requirements: Some countries require that potential importers or exporters secure permission from governmental authorities before conducting trade transactions, a requirement known as an import license.
f. Administrative delays: Closely related to specific permission requirements are intentional administrative delays, which create uncertainty and raise the cost of carrying inventory.
g. Reciprocal requirements: Governments sometimes require that exporters take merchandise in lieu of money or that they promise to buy merchandise or services in the country to which they export. This requirement is common in the aerospace and defense industries—sometimes because the importer is short of foreign currency to purchase what it wants, and sometimes because the sales are so large the buyer has strong negotiating power.