Non-Tariff Barriers:

Non Tariff Barriers (NTBs), unlike tariffs, may impose direct restrictions on the  inflow of imported goods. For instance, conventional NTBs  like import quotas directly  restrict the quantum of imports into  the domestic  country. While other NTBs discussed below restrict the flow of traded goods in a more indirec  t manner. From the following discussion you will see  how countries are  resofting  to newer, more indirect forms of NTBs, most often in order to circumvent the directives of multilateral trade agreements like the WTO 

Import quotas impose direct restrictions on the quantum of imports into a country. In  practice quotas are administered through a  system  of  import licenses. Only license holders are given  permission  to  import  specified quantities of the imported good into the domestic market. You will see that with a quota the domestic price of.an imported good will always  be higher  than its world market price. License holders buy  the imported goods at world market prices and then sell at higher prices  in  the domestic market.

In what follows we will examine the impact of an import quota under different market  structures in  the  domestic economy. We  first discuss  the  case  of perfectly competitive markets and then that of monopoly.