Final answer:
A nontariff barrier impedes trade through regulations or procedures that do not involve tariffs. Examples include safety standards and rules-of-origin regulations. The WTO works to reduce such barriers to enhance global trade.
Step-by-step explanation:
A nontariff trade barrier is indeed a government policy, regulation, or procedure that impedes trade through means other than explicit tariffs. These barriers are various ways that a nation can impose rules, regulations, inspections, and paperwork that increase the cost or complexity of importing products, effectively protecting domestic industries without the utilization of explicit taxes on imports, which are tariffs.
For example, safety standards can act as a form of nontariff barrier by limiting the ability of foreign products to enter a market unless they comply with stringent local regulations. Another form is "rules-of-origin" regulations, which require a product to have undergone its last substantial transformation in the country of export to obtain a specific label, such as "Made in Country X." This can affect supply chains, as manufacturers may relocate production processes to benefit from these labels or avoid trade restrictions. The World Trade Organization, or WTO, aims to reduce such barriers and facilitate global trade.
Protectionism, a related concept, is the practice of crafting policies to shield local industries from foreign competition. One manifestation of this is the "race to the bottom", a situation where countries may lower environmental or other standards in order to attract business, adding pressure on other countries to do the same, thus impacting global standards negatively.