Are All Barriers on Trade Intentional?

What is Trade Barriers? Is it a Government imposed restriction on the free international exchange of goods and service? There are different ways in which trade barriers can be created unintentionally. After the incident of September 11, not only United States but also countries around the world have tightened their security on trade policies with their trading partners.  Due to which, government have to spend millions of dollar for the security of its people and business from major airports, seaport and harbors to domestic security that has increased the cost of countries economy. This shows that one country is loosing its comparative advantage since each has to go through security clearance and checking when entering into another country.

In today’s world, Majority of traders is getting affected since they have to face cross-border transactions, tough security in airport and seaports. The costly inspection and monitoring adds up which automatically makes the product to be expensive compare to the domestic manufacturing companies. This result the firm to be less productive and lead to decrease overall economic efficiency.

In context of Nepal, The trade weighted average tariff rate is very high at 14.3 percent, with pervasive non-tariff barriers further suppressing freedom to trade. The political instability has harmed the private investment and due to inefficient investment, government wishes much of foreign direct investment (FDI). Since Nepal is land lock country, it faces challenges in doing trade due to lack of territorial access to the sea, remoteness and isolation from world markets. Nepal has been facing problems such as high transit transportation costs due to landlocked and mountain terrains, declining trade volume, decreased foreign direct investment and high inflation, unemployment and economic development.

Therefore, not all barriers are intentional. It is create unintentionally due to situation and by nature.

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