World Industry. Trade Barriers as measured by the MFN (Most Favored Essay

World Industry. Trade Barriers as measured by the MFN (Most Favored Nation) applied tariff rates - Essay Example Prohibitions on import of these washing machines have the purposes of promotion of competition, health, security, safety, and environmental safety. There are bans put on importing used machineries in many countries and where this ban is not in effect, seriously huge tariffs are imposed on these machinery. The use of tariff concessions and exemptions is simply an industrial policy tool to safeguard a country’s interests. There is a general discrimination when it comes to domestic sales and the excise taxes in terms of discriminating or putting trade barriers to imports and in many cases this has been engineered by the need to protect what is considered local. Countries have been seen to levy import tax and tariff-inclusive prices for goods while carrying out this policy. To the effecting country, this is a benefit derived from controlled international imports, while to those involved in the import trade is quite a heavy burden considering they are in business to make profits an d grow (Gereffi, 2001, pp. 1-5). Barriers to international trade for clothes washing machines include requirements for registration and bureaucratic documentations; tariffs; the customs valuation, imposition of minimum prices for imports and the requirements of pre-shipment inspections; other levies, taxes and various charges including domestic taxes; prohibitions slapped on imports, restrictions, issues of licensing and quotas imposed on imports; some contingency measures imposed to control market panic; and the various standards and technical requirements most of which are never met by even the local producers (Francois, et al., 2000, pp.2-58). It is thought that when we have a uniform sort of tariff structure for washing machines, it is better than having considerable dispersion where large tariffs peaks and troughs are experienced in different countries. This is because the economic inefficiency or welfare costs do increase in a tariff regime with the degree of a given dispersio n. This has been attributed to the fact that we have a considerable weight loss which increases to a larger extent than does the increase in the tariff rates. Another argument posed is that washing machines having a uniform tariff structure get a very strong support coming from a political economy given that such uniform tariffs are easier to handle and of course more transparent than the non-uniform tariff rates. This could be due to the fact that the political power influence from conflicting groups is drastically reduced. This has a lot to do with the fact that uniform tariff rates require cross-industrial consensus and are less likely to get escalated as compared to the non-uniform ones (Fleisher & Bensoussan, 2010, pp.8-156). The data in tables 1 to 10 below show tariff rates and their averages across the world as investigated by WTO on MFN for clothes washing machines (WTO, 2010). Average duties, minimum average duty, maximum average duty and mean of such averages has been cal culated and tabulated as per every year for the duration of 10 years starting from 2001 to 2010. Table 1: 2001 World tariff rates tabulations for top-loading and front loading-type washing machines, of a dry linen capacity > 10 kg Count Country Binding Year Number of TL Number of AV duties Average of AV Duties Minimum AV Duty Maximum AV Duty Duty Free TL (%) Number of Non-AV Duty 1 Egypt MFN 2001 HS96 845020 1 1 40.0 40 40 0.0 0 2 India MFN 2001 HS96 845020 1 1 35.0 35 35 0.0 0 3 Pakistan MFN 2001 HS96 845020 1 1 30.0 30 30 0.0 0 4 Jordan MFN 2001 HS96 845020 1 1 30.0 30 30 0.0 0 5 Zimbabwe MFN 2001 HS96 845020 2 2 22.5 5 40 0.0 0 6 Zambia MFN 2001 HS96 8