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Goods and services do not flow completely freely among countries, even among those with excellent relations. Countries put up barriers to trade for a number of reasons. Sometimes it is to protect their own companies from foreign competition. Or it may be to protect consumers from dangerous or undesirable products. Or it may even be unintended, as can happen with complicated customs procedures. Tariff barriers have been reduced considerably over the past few decades but other obstacles remain. Getting rid of unnecessary trade barriers would give a great boost to global economic welfare.
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Chapter 4 looks at the ways governments try to control trade. The most direct way is through tariffs on imports. But other means are also important, including subsidies to domestic producers and exporters or non-tariff measures such as product standards or customs procedures.
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Welfare gains in trade liberalisation scenarios
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OECD Insights: International Trade quiz
