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tended to regulate the access to and cost of foreign exchange for imports and define the terms of payment. They can also contribute to increase import cost just like tariff measure.

Advance payment whereby a sum of money is paid at the time the deal has been sealed and multiple exchange rate falls under this category.

3.1.6 Trade-related investment measures

This section can be divided into Local content measures and trade balancing measures.

Local content measures

Requirement to use certain minimum levels of locally made component, restricting the level of imported components. E.g. Imports of clothing is allowed only if more than 50% of the materials used are originating from the importing country.

Trade balancing measures

Measures limiting the purchase or use of imported products by an enterprise to an amount related to the volume or value of local products that it exports. E.g. A company may import materials and other products only up to 80% of its export earning of the previous year.

3.1.7 Export related measures

Subsidies may be directly applied to output or value added, or they may be indirectly applied, i.e. paid to material or other inputs into the production process. They may arise from payments or the non-collection of taxes that would otherwise be due. Restrictions by mean of taxes or prohibitions may also be imposed on production or exports.

4.0 Consequences of NTMs

4.1 Problems caused by the mushrooming of NTMs

Bora (2003) identified three main consequences of the mushrooming the NTMs.

The overall level of trade is lower than it should have been.

Internationally prices are not at the levels dictated by the law of one price.

The elasticity of trade flows to price changes is dampened.

The first two points are basic to the economist’s rationale for trade, namely increasing efficiency. The last point, namely the dampened responsiveness of trade flows to price changes, is of major interest. Three issues have been identified and there are:

The first issue is that, our global economy today has external imbalances of unprecedented size in absolute terms. The preferred means to resolve these imbalances is through exchange rate flexibility. At the same time, it is commonly observed that exchange rates tend to overshoot as the adjustment process unfolds. A dampening of trade elasticities would logically work to slow or weaken the adjustment of external imbalances. Accordingly, imbalances might persist for longer periods and potentially reach larger dimensions while the exchange rate swings needed to correct those imbalances would be of even greater amplitude. Turning the argument around, increasing the responsiveness of trade flows to prices would cause more rapid external adjustment of imbalances to exchange rate corrections and thus reduce the chance of large imbalances arising in the first place. Without going so far as to make judgments concerning the quantitative significance of NTMs in the current problems of global adjustment, a proliferation of such measures might well be a contributing factor.

Second, a slower response of trade flows to prices is effectively the same as a reduction in similarity of domestic and foreign goods and services. That is, there is an im本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。