Effect of Bound Tariff and Applied Tariff on Handloom Products
Keywords:
WTO, NTBsAbstract
A tariff is a tax or duty imposed by one nation on the imported goods or services of another nation. Tariffs are a political tool that have been used throughout history to control the amount of imports that flow into a country and to determine which nations will be granted the most favorable trading conditions. High tariffs create protectionism, shielding a domestic industry's products against foreign competition. High tariffs usually reduce the importation of a given product because the high tariff leads to a high price for the customers of that product. There are two basic types of tariffs imposed by governments on imported goods. First is the Ad Valorem tax which is a percentage of the value of the item. The second is a Specific Tariff which is a tax levied based on a set fee per number of items or by weight.
References
See, Anderson, J.E. and E van Wincoop (2004), “Trade Costs”, Journal of Economic Literature, and references quoted therein. Authors quote “A rough estimate of the tax equivalent of “representative” trade costs for industrialized countries is 170 percent. This number breaks down as follows: 21 percent transportation costs, 44 percent border-related trade barriers, and 55 percent retail and wholesale distribution costs (2.7=1.21*1.44*1.55).”
See Bora, Bijit (2003), “The Quantification and Impact of Non-Tariff Measures”, paper presented at OECD Global Forum on Trade: The Market Access Challenge in the Doha Development Agenda, Paris 4-6 June 2003, and WTO document TN/MA/SS, 11 Sept. 2002.
See, among others, Vermani, A (1991), “Demand and Supply Factors in India’s Trade”, Economic and Political Weekly, Feb. 9, 1991: and Mehta, R. and P. Mathur (2004), “India’s Export by Countries and Commodities: On the estimation of Forecasting Model using Panel Data”, RIS – DP # 84/2004.
Mehta, R. (2000), QR Removal and India’s import, RIS, make an attempt to estimate the impact of QR removal on India’s
