TOOLS OR INSTRUMENTS OF TRADE RESTRICTION
Tools or instruments normally used for international trade restriction are the following:
- Import duties or tariffs: This is a tax imposed on imported goods to reduce the amount of trade.
- Foreign exchange control: Trade can be controlled by reducing the foreign exchange available for trade transactions.
- Devaluation: By lowering the value of a country’s currency vis-a-vis others, importation becomes costly while export becomes cheaper.
- Embargo: This is the prohibition or outright ban placed on some imported goods
- Import monopoly: This refers to a situation in which the government of a country takes over the importation of certain goods which are only essential to the country.
- Import quota: Import quota restricts imports by imposing a limit on the quantity of goods that can be imported into a particular country.
- Preferential duties: In order to either encourage or discourage the importation of certain goods from certain countries discriminate duties are charged on these
- Excise duties reduction: This method helps to reduce the prices of locally made goods so as to enable people to patronize them instead of foreign made goods.
- Import license: Import license is a permit that allows an importer to bring a certain quantity of foreign goods into a country and allows him to purchase the foreign currency required to pay for them.