Question

A natural barrier that faces Argentina when it sells beef to Siberia is: Group of answer choices custom regulations distance government controls exchange controls taxes

Answer 1

A natural barrier that faces Argentina when it sells beef to Siberia is distance.

Why distance is a barrier to trade?

Due to the fact that markets within countries are typically closer together than markets between countries, distance reduces international trade in comparison to domestic trade. Most overseas markets have higher transportation expenses than they do for domestic markets, frequently by a significant margin. Given that distance seems to restrict trade more than can be compensated for by transportation, it is possible that distance is also linked to greater non-transportation trade costs.

For example, the price of carrying the beef from Argentina to Siberia could make it too expensive even though farming beef there may be less expensive than raising beef in the freezing cold of Siberia. Thus, one of the inherent obstacles to international trading is distance.

Learn more about trade barriers here:

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