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BARRIERS TO
ENTRY

By: Hardeepika Singh

Anti-Dumping Duty
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Dumping : when the goods are exported by a country to

another country at a price lower than its normal value.
A penalty imposed on suspiciously low-priced imports, to
increase their price in the importing country and so protect
local industry from unfair competition.
purpose :To rectify the trade distortive effect of dumping and
re-establish fair trade.

Ref: http://commerce.nic.in/traderemedies/ad_measures_3.asp

Measurement of Dumping
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Normal Value: Normal value is the comparable price at

which the goods under complaint are sold in the
domestic market of the exporting country.
Export price: The Export price of the goods allegedly
dumped into India means the price at which it is exported
to India.
Dumping Margin: The margin of dumping is the
difference between the Normal value and the export
price of the goods.
Export price> Normal value

Embargo
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An embargo is the partial or complete

prohibition of commerce and trade with a
particular country.
Example:
E.U. imposed embargo on Indian Alphanso,
bitter gourd, eggplant till December 2015.
Reason: contaminated food, pesticides.

U.S. Embargo against Cuba

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US-Cuba Relation 1800: US purchased 87% of Cubas

export and had control over sugar Industry.
1959: Fidel Castro took over Cuba and formed a
communist government.
1959 to 1960: Castro seized $1.8 billion of US assets in
Cuba, making it the largest uncompensated taking of
American property by a foreign government in US history.
Cuba: Communist government
(A form of government where a single ruling party is dominant)
What US Demanded: Shift from communism to democratic government and
protection of human rights.
Eisenhower (1953-1961)Cancelled 7,00,000 tons import of sugar

US Imposition of embargo
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Prohibition on:
Travel by residents of the two nation.
Prohibition of trade and commerce.
Purchase or importation of any merchandise
of Cuban origin, with the exception of
"information or information materials
Helms-Burton Act

Sanctions
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Sanctions are partial Emargo.

Official order or law stopping trade on a certain
type of product, service or technology with
another country to force the leaders to make
political changes.

U.S., E.U., Canada places sanctions on Russia

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Russia annexation of Republic of Crimea and City of

Sevastopol (Ukraine).
The annexation was condemned by United nation general
assembly.
E.U., US and Canada imposed sanctions on Russia:
Suspension of talks regarding military, space, Investment bans.
Travel bans on key officials.
Bans on fund raising activities by oil companies and banks.

Subsidies
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To encourage domestic production or to protect

the domestic producers from the foreign
competitors, government pays to a domestic
producer by reducing operational costs.

Advantages and Disadvantages of Subsidies

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Advantages

International competitiveness.

Disadvantages

Subsidies are the national costs.

Economics of scale and low cost Sometimes, subsidies protect

production
the inefficiency and lethargy of the
domestic firms

Tariffs
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Tariffs refer to the tax imposed on Imports.

Impact: restrict trade as it increases price of imported goods

and services
Types of Tariffs:

Specific Tariffs (are levied as a fixed charge for each unit of the
product imported).

Ad Valorem (are levied as a proportion of the value of the imported

goods.)

Tariff Barriers
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Custom Duty
Export duty
Import Duty