Hidden Protectionism

Summary:

Tariffs impede trade. They are the most visible instrument for protecting domestic companies against foreign competition. So-called non-tariff barriers to trade (NTBs) are less visible. NTBs include restricting import quantities, registration formalities for imports or state aid for domestic suppliers.

The trend towards implementing NTBs has increased substantially since the financial and economic crisis 2008/2009. Generally, the increasing implementation of NTBs is a worrying development since, just like tariffs, NTBs slow global trade and thus the economic welfare of countries involved. In fact, the development of world trade has lagged behind expectations in recent years.

Against this background, our study analyzes the effects that NTBs could have on global trade in general and on the trade of selected individual countries, such as Germany or China.

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