TRADE BARRIERS IN EUROPE
Though there are many benefits to voluntary trade, governments will
sometimes use trade barriers to limit what can be traded to their people,
and with whom their people can trade. A country might impose a tariff, or
tax, on imports of certain products. The tariff makes the imported good cost
more. When countries outside of the European Union (EU) want to sell their
goods in the European Union, they must pay tariffs. Countries within the EU
do not have to pay a tariff on goods they buy or sell to another EU country. If
a U.S. company wants to export fruit to a country in the EU, the U.S.
company must pay a tariff first.
Import quotas are another type of trade barrier. Quotas limit the
number of goods that can be imported from a certain country. The EU places
a quota on the amount of steel that can be imported from certain countries.
The effect is similar to a tariff because it makes steel from those countries
harder to get, and thus, more expensive. That can help steel producers
within the EU sell more steel.
An embargo, or ban on trade with a certain country, is normally put in
place for political reasons. In recent years, the EU began placing embargoes
on the sale of certain weapons and other technologies to Iran. This was done
because the countries of the EU suspected that Iran was trying to build a
nuclear weapon. The EU countries hope that their embargo will make it more
difficult for Iran to build this type of weapon.
Many countries are working to remove trade barriers, with the hope
that increased trade will benefit their economies. One of the main goals of
the EU is to remove tariffs and quotas between member nations. European
nations also work with the World Trade Organization (WTO). This global
organization is dedicated to the goal of removing trade barriers among all of
its 153 member nations.
Name
Date
QUESTIONS – TRADE BARRIERS IN EUROPE
1. Why do countries use trade barriers?
2. A tax on imports is known as a _______________.
3. Tariffs make goods that are imported cost ____________.
4. A limit on the amount of goods that can be imported from a country is
known as a _______________.
5. A ban on trade is known as a ____________________.
6. Why would a country place an embargo on a country?
7. What is a major goal of the WTO?
8. How many countries (nations) in the world belong to the WTO?