What are non-tariff barriers to trade?

Non-tariff barriers to trade refer to the various regulations, policies, and restrictions that countries implement that can affect the flow of goods and services across borders, but do not involve direct taxes or tariffs. These barriers can include a wide range of measures such as import licensing, quality standards, safety regulations, and other bureaucratic or administrative rules that imports must comply with before entering a market.

The essence of non-tariff barriers lies in the fact that they can be more subtle and less transparent than tariffs but can still have significant impacts on international trade. They can be used to protect domestic industries by making it more difficult or expensive for foreign competitors to enter a market. Understanding non-tariff barriers is crucial for businesses engaged in global trading, as these regulations can present significant challenges and may require careful navigation to ensure compliance and successful market entry.

In contrast, tariffs are direct taxes imposed on imports, while subsidies are financial support given to local industries, and quotas are limitations on the amount of a specific good that can be imported. Each of these mechanisms can influence trade but they do not fall under the category of non-tariff barriers.