'Direct' and 'indirect' trade (1 Viewer)

[ew139]

Would anyone be able to tell me the difference between ' direct' and 'indirect' policies that promote and restrict trade?

Is this just trade agreements and blocs, or something else?

Thanks

 

[Ozza]

Certainly,

I'm not sure if this is exactly what your after; But in the global economsy we have direct and indirect (otherwise known as 'technical') barriers to trade. Direct is all the obvious artifical barriers to trade that to gov't set up. I.e. tarrifs and subsidies etc.

However under certain economic conditions, we can also have 'technical restrictions' and licencing acts. Probably one of the best examples for this is either the inconsistency of health restrictions in different areas of a country, thus the making it hard for a firm to export to the whole country; Or, the use of environmental policies that restrict certain trade items from other countries... Lol, unfortunately I can't think of a really good example atm... can anyone else?
All I have is the WTO ruling that the US law protecting sea turtles, dolphins and clean air standards are a barrier to free trade. Thus Venezeula couldn't export their oil there (because of clean air standards), however when they claimed it was a restriction on free trade and won, they were able to sned imports of oil to the US that didn't meet US environmental standards.

Hope that clears things up (a little...)

 

[veloc1ty]

An example of an indirect policy (or 'back door method') is the extremely high health standards the United States sets on beef imports, which forces the Australian beef exporters to jump through loops just to get it on the American market. The reason it's a trade restriction is because even the beef producers within America wouldn't be able to pass the health regulations set for importers in most cases.

 

[bikapika]

if an economy uses a fixed currency exchange rate, then it is an indirect trade barrior.

 

[MyLoveIsPure]

u people are freaks is that even on the syallabus?

 

[ew139]

Thanks, that makes it much clearer!