Non-tariff Distortions of Trade

Abstract

As tariffs have been progressively reduced by multilateral agreements in GATT and by regional trade agreements such as EEC and EFTA, attention has focused more and more on other impediments to trade. Some non-tariff measures have been recognised and discussed for a long time; for example quotas, export subsidies and differences in industrial standards. Many other measures, however, either were not apparent or were considered to be of little consequence when tariffs were high. Following the very substantial reduction in tariffs agreed during the Kennedy Round negotiations and the increased significance of non-tariff barriers in EEC and EFTA now that industrial tariffs have been eliminated, these distortions of trade flows have developed into a major issue of commercial policy. In part the interest derives from a wish to extend trade liberalisation beyond tariff reductions, and in part because of the fear that non-tariff barriers may be substituted for tariffs removed according to international agreements.