(a) Explain five functions of the Customs Authority (b) State five advantages of international trade

Answer Details

(a) Five functions of the Customs Authority

1. Assessment and collection of duties: The authority computes and collects import and export duties, excise duties and other tariffs on goods crossing the national frontier, thereby raising revenue for the government.
2. Prevention of smuggling: It patrols the borders, ports and airports to detect and seize goods brought in or taken out illegally so as to protect government revenue and local industries.
3. Control of prohibited and restricted goods: It enforces bans on dangerous or illegal items such as hard drugs, arms and counterfeit goods, and controls the movement of restricted goods that require licences.
4. Compilation of trade statistics: By recording the quantity and value of goods imported and exported, the authority provides data used for planning the balance of payments and national economic policy.
5. Enforcement of trade agreements and quotas: It ensures that import quotas, embargoes and international trade agreements entered into by the government are observed by traders.

(b) Five advantages of international trade

1. Access to goods not produced locally: A country can obtain raw materials, machinery and products that its climate or resources cannot provide.
2. International specialisation: Countries concentrate on producing what they make best and most cheaply, raising world output and efficiency.
3. Wider market for surplus: Producers can sell surplus output abroad, encouraging large-scale production and higher incomes.
4. Source of government revenue: Import and export duties provide funds for the government.
5. Promotes friendship and cooperation: Trading relations foster peace, understanding and technical cooperation among nations.