This article will help you to learn about the difference between tariff barriers and non-tariff barriers.
Difference between Tariff Barriers and Non-Tariff Barriers
1. With tariffs the Government receives the revenue whereas no revenue is received by the Government by applying non-tariff measures.
However, it is favoured as an appropriate measure to meet the demand of the country and to protect the industry.
2. Non-tariff measures protect the procedures and make them feel more secure than under a tariff. But incentives are not there under tariffs.
3. In tariff customer’s classification and valuation procedures pose a problem before the customs authorities. Where-as under non-tariff measures no such problem arises.
4. Non-tariff barriers to trade induce the domestic producers to form monopolistic organisations with a view to keeping output low and prices high. This is not possible under import duty.
Non-tariff barriers remain ineffective if monopolistic tendencies prevail in the country.
5. Non-tariff measures are flexible than tariff. Imposition of tariff and amendments are subject to legislative enactment.
6. In non-tariff the price differences will be greater in two countries because there is no free flow of imports; but in tariff—price differentiation will be equal to the cost of tariff and transportation between exporting and importing countries.
7. Tariffs are simple to operate. Tariff rates once fixed through legislation require no individual allocation of licensing quotas or exchange.
For non-tariff measures numbers of authorities are there to administer. It may result in political interference or corruption.
8. Tariff favours particularly to efficient firms in the country but non-tariff measures benefit established firm because they get quotas or import licenses.
9. Non-tariffs discriminate against new-comers but tariff do not discriminate.