1. The transition from tariffs to non-tariff barriers: One of the reasons why industrialized countries have moved from tariffs to NTBs is the fact that developed countries have sources of income other than tariffs. Historically, in the formation of nation-states, governments had to get funding. They received it through the introduction of tariffs. This explains the fact that most developing countries still rely on tariffs as a way to finance their spending. Developed countries can afford not to depend on tariffs, at the same time developing NTBs as a possible way of international trade regulation. The second reason for the transition to NTBs is that these tariffs can be used to support weak industries or compensation of industries, which have been affected negatively by the reduction of tariffs. The third reason for the popularity of NTBs is the ability of interest groups to influence the process in the absence of opportunities to obtain government support for the tariffs.
2. Non-tariff
barriers today: With the exception of export subsidies and quotas, NTBs are most similar to the tariffs. Tariffs for goods production were reduced during the eight rounds
of
negotiations in the WTO and the General Agreement on
Tariffs and Trade (GATT). After lowering of tariffs, the principle
of
protectionism
demanded the introduction of new NTBs such as technical barriers to trade (TBT). According to statements
made at United Nations Conference on Trade and Development (UNCTAD, 2005), the use of NTBs, based on the amount and control
of
price levels has decreased significantly from 45% in 1994 to 15% in 2004, while
use of other NTBs increased from 55% in 1994 to 85% in 2004.
Increasing consumer demand for safe and environment friendly products also have
had
their impact on increasing
popularity of TBT. Many NTBs
are governed by WTO agreements,
which
originated in the Uruguay Round (the TBT Agreement, SPS
Measures Agreement, the Agreement
on
Textiles and Clothing), as well as GATT articles. NTBs in the field of services have become as important as in the field of usual trade.
Most of the NTB can be defined as protectionist measures, unless they are related
to
difficulties in the market, such as externalities and information asymmetries
between consumers and producers of goods. An example of this is safety standards and
labeling requirements.
The need to protect sensitive to import industries, as well as a wide range of trade restrictions, available to the governments of industrialized countries, forcing them to
resort to use the NTB, and putting serious obstacles to international trade and world economic growth. Thus, NTBs can be referred as a new of protection which
has replaced tariffs as an old form of
protection.
3. Limits of Foreign Exchange Trading
The foreign exchange market of the country is confined to the city of Dhaka. The 32 scheduled banks operating as authorized dealers in the inter-bankforeign exchange
market are not permitted to run a position beyond certainlimits. In the event of speculation on an appreciation of the value, anauthorized dealer may buy more foreign currencies than it needs, but at theend of the day it must maintain its limit
by
selling excess currencies
either inthe inter-bank
market or to customers.
Authorized dealers maintain clearingaccounts with the Bangladesh Bank in dollar,
pound sterling, mark and yento settle their mutual claims. If there any excess
foreign exchange
holdingsexist after these transactions, it is obligatory for them to sell it to theBangladesh Bank. In case of shortfall of the limit, authorized dealers
have tocover it either through purchase from the market or from the
BangladeshBank.