Norvada is a small nation that has followed protectionist policies for many years. Which of the following would be an example of a nontariff barrier established by Norvada?
A) Establishment of a tax levied on imported goods so that foreign products are more expensive than competing domestic goods.
B) Establishment of a tax levied on imported goods designed primarily to raise money for the government.
C) Establishment of restrictive quality standards requiring foreign firms to make expensive modifications to their products before they can be exported to Norvada.
D) Participation in the Uruguay Round of GATT negotiations.

Question

Quizplus · Accepted Answer

The establishment of restrictive quality standards that foreign firms must comply with before exporting to Norvada is an example of a nontariff barrier. This is because it creates a barrier to entry for foreign firms, as they must modify their products to meet Norvada's requirements, which can be costly and time-consuming. This type of barrier is often used by protectionist countries to limit imports without having to resort to tariffs, which can be more easily challenged under international trade laws.

Norvada Is a Small Nation That Has Followed Protectionist Policies