Legal Definitions - nontariff barrier

Nontariff barrier (NTB) stands for Nontariff Barrier.

A nontariff barrier is a government policy, regulation, or practice that restricts international trade without imposing a direct tax (a tariff) on imported or exported goods. These measures make it more difficult, costly, or time-consuming for foreign products to enter a domestic market, or for domestic products to be sold abroad, thereby limiting the free flow of goods and services between countries.

Examples:

• Import Quotas: Imagine Country Alpha decides that only 50,000 units of a specific type of electronic gadget can be imported from Country Beta each year.
  This is a nontariff barrier because it directly limits the quantity of goods that can enter Country Alpha, restricting trade without imposing an additional tax on the gadgets themselves.
• Strict Product Standards: Consider Country Gamma, which requires all imported food products to undergo a unique, lengthy, and expensive inspection and certification process that is different from internationally recognized standards, even if the products already meet high safety criteria in their country of origin.
  This acts as a nontariff barrier because the specialized and costly certification process creates a significant hurdle for foreign food producers, making it more difficult and expensive for them to sell their products in Country Gamma, thereby limiting imports.
• Domestic Subsidies: Suppose the government of Country Delta provides substantial financial aid to its local textile manufacturers, allowing them to produce and sell textiles at prices significantly lower than what foreign manufacturers can offer without government support.
  This is a nontariff barrier because, without directly taxing imported textiles, the subsidy makes domestic textiles artificially cheaper, creating an unfair competitive advantage for local producers and effectively reducing the demand for imported textiles.