Russia Trade Barrier

Russia is considered as the world’s largest country that located in the Eurasia region. With the geography of the country, Russia has competitive advantages in terms of natural resources, ports, neighbouring countries, skilled labours and monetary availability. Since the country is surrounded by the ocean and has many ports, Russia can trade easier, cheaper and faster. These could help the country efficiently produce the products and widely distribute the products throughout the world.

Even though the domestic market in Russia is gigantic and able to expand in the future, there are many factors that play an important role in investing business in Russia. Because Russia is located between Europe and Asia and has many neighboring countries, investors may face different trading rules and regulations that was created by Russian government.

According to International Trade Administration (2017), “In August 2012, Russia became a member of the World Trade Organization (WTO), lowering the average bound tariff rate on industrial and consumer goods, from almost 10% in 2011 to 7.8% by 2017.” We can see that lowering imported tax is benefits to the country as they can stimulate imports rates.

In reality, governments interfere with trade by creating trade barriers. Trade barrier is policy that prevents people from trading with each other. There are two types of trade barriers which are tariff and non tariff barrier. There are two types and forms of tariffs which are import tariff, export tariff, specific tariff and ad valorem tariff. The examples of non tariff barriers are subsidies, import quotas, voluntary export restraints, local content requirement, administrative policies and anti dumping duties.

Tariff is tax that imposed on imports or exports. Ad valorem tariff, one of the forms of tariffs, is tax as a proportion of the value of the imported goods which is mainly use on consumer products. For Russia, importing a car to this country