Trade is basically the activities of buying and selling of goods both locally and internationally.
- Formal trade barrier refers to factors which affect trading activities negatively and are indeed legal. Such barriers include import duties, taxes etc
- Informal trade barrier refers to factors which affect trading activities negatively but not from government and they includes transport costs, cumbersome customs practices, regulations, corruption etc
The decision on whether the trade barrier are formal or informal are as follow:
- The Law is an example of Formal trade barrier.
- Various belief like this is an example of Informal trade barrier.
- The special tax imposed on books is an example of Formal trade barrier.
- The required nutritional information is an example of Formal trade barrier.
- Hiring of family members is an example of Informal trade barrier.
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