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Non-tariff barriers to trade (NTBs) are trade barriers that restrict imports, but are unlike the

usual form of a tariff. Some common examples of NTB's are anti-dumping measures
and countervailing duties, which, although called non-tariff barriers, have the effect of tariffs
once they are enacted.
Their use has risen sharply after the WTO rules led to a very significant reduction in tariff use.
Some non-tariff trade barriers are expressly permitted in very limited circumstances, when they
are deemed necessary to protect health, safety, sanitation, or depletable natural resources. In
other forms, they are criticized as a means to evade free trade rules such as those of the World
Trade Organization (WTO), the European Union (EU), or North American Free Trade
Agreement (NAFTA) that restrict the use of tariffs.
Some of non-tariff barriers are not directly related to foreign economic regulations but
nevertheless have a significant impact on foreign-economic activity and foreign trade between
Trade between countries is referred to trade in goods, services and factors of production. Non-
tariff barriers to trade include import quotas, special licenses, unreasonable standards for the
quality of goods, bureaucratic delays at customs, export restrictions, limiting the activities of
state trading, export subsidies, countervailing duties, technical barriers to trade, sanitary and
phyto-sanitary measures, rules of origin, etc. Sometimes in this list they include macroeconomic
measures affecting trade.
Six Types of Non-Tariff Barriers to Trade[edit]

This section is in a list format that may be better presented
using prose. You can help by converting this section to prose,
if appropriate. Editing help is available. (September 2014)
1. Specific Limitations on Trade:
1. Import Licensing requirements
2. Proportion restrictions of foreign domestic goods (local content requirements)
3. Minimum import price limits
4. Free
5. Embargoes
2. Customs and Administrative Entry Procedures:
1. Valuation systems
2. Anti-dumping practices
3. Tariff classifications
4. Documentation requirements
5. Fees
3. Standards:
1. Standard disparities
2. Intergovernmental acceptances of testing methods and standards
3. Packaging, labeling, and marking
4. Government Participation in Trade:
1. Government procurement policies
2. Export subsidies
3. Countervailing duties
4. Domestic assistance programs
5. Charges on imports:
1. Prior import deposit subsidies
2. Administrative fees
3. Special supplementary duties
4. Import credit discrimination
5. Variable levies
6. Border taxes
6. Others:
1. Voluntary export restraints
2. Orderly marketing agreements
Examples of Non-Tariff Barriers to Trade[edit]

This section is in a list format that may be better presented
using prose. You can help by converting this section to prose,
if appropriate. Editing help is available. (September 2014)
Non-tariff barriers to trade can be the following:
Import bans
General or product-specific quotas
Rules of Origin
Quality conditions imposed by the importing country on the exporting countries
Sanitary and phytosanitary conditions
Packaging conditions
Labeling conditions
Product standards
Complex regulatory environment
Determination of eligibility of an exporting country by the importing country
Determination of eligibility of an exporting establishment (firm, company) by the importing
Additional trade documents like Certificate of Origin, Certificate of Authenticity etc.
Occupational safety and health regulation
Employment law
Import licenses
State subsidies, procurement, trading, state ownership
Export subsidies
Fixation of a minimum import price
Product classification
Quota shares
Foreign exchange market controls and multiplicity
Inadequate infrastructure
"Buy national" policy
Over-valued currency
Intellectual property laws (patents, copyrights)
Restrictive licenses
Seasonal import regimes
Corrupt and/or lengthy customs procedures
Types of Non-Tariff Barriers[edit]
There are several different variants of division of non-tariff barriers. Some scholars divide
between internal taxes, administrative barriers, health and sanitary regulations and government
procurement policies. Others divide non-tariff barriers into more categories such as specific
limitations on trade, customs and administrative entry procedures, standards, government
participation in trade, charges on import, and other categories.
The first category includes methods to directly import restrictions for protection of certain
sectors of national industries: licensing and allocation of import quotas, antidumping and
countervailing duties, import deposits, so-called voluntary export restraints, countervailing
duties, the system of minimum import prices, etc. Under second category follow methods that
are not directly aimed at restricting foreign trade and more related to the administrative
bureaucracy, whose actions, however, restrict trade, for example: customs procedures, technical
standards and norms, sanitary and veterinary standards, requirements for labeling and packaging,
bottling, etc. The third category consists of methods that are not directly aimed at restricting the
import or promoting the export, but the effects of which often lead to this result.
The non-tariff barriers can include wide variety of restrictions to trade. Here are some example
of the popular NTBs.
The most common instruments of direct regulation of imports (and sometimes export) are
licenses and quotas. Almost all industrialized countries apply these non-tariff methods. The
license system requires that a state (through specially authorized office) issues permits for
foreign trade transactions of import and export commodities included in the lists of licensed
merchandises. Product licensing can take many forms and procedures. The main types of
licenses are general license that permits unrestricted importation or exportation of goods
included in the lists for a certain period of time; and one-time license for a certain product
importer (exporter) to import (or export). One-time license indicates a quantity of goods, its cost,
its country of origin (or destination), and in some cases also customs point through which import
(or export) of goods should be carried out. The use of licensing systems as an instrument for
foreign trade regulation is based on a number of international level standards agreements. In
particular, these agreements include some provisions of the General Agreement on Tariffs and
Trade and the Agreement on Import Licensing Procedures, concluded under the GATT (GATT)..
Licensing of foreign trade is closely related to quantitative restrictions quotas - on imports and
exports of certain goods. A quota is a limitation in value or in physical terms, imposed on import
and export of certain goods for a certain period of time. This category includes global quotas in
respect to specific countries, seasonal quotas, and so-called "voluntary" export restraints.
Quantitative controls on foreign trade transactions carried out through one-time license.
Quantitative restriction on imports and exports is a direct administrative form of government
regulation of foreign trade. Licenses and quotas limit the independence of enterprises with a
regard to entering foreign markets, narrowing the range of countries, which may be entered into
transaction for certain commodities, regulate the number and range of goods permitted for import
and export. However, the system of licensing and quota imports and exports, establishing firm
control over foreign trade in certain goods, in many cases turns out to be more flexible and
effective than economic instruments of foreign trade regulation. This can be explained by the
fact, that licensing and quota systems are an important instrument of trade regulation of the vast
majority of the world.
The consequence of this trade barrier is normally reflected in the consumers loss because of
higher prices and limited selection of goods as well as in the companies that employ the imported
materials in the production process, increasing their costs. An import quota can be unilateral,
levied by the country without negotiations with exporting country, and bilateral or multilateral,
when it is imposed after negotiations and agreement with exporting country. An export quota is a
restricted amount of goods that can leave the country. There are different reasons for imposing of
export quota by the country, which can be the guarantee of the supply of the products that are in
shortage in the domestic market, manipulation of the prices on the international level, and the
control of goods strategically important for the country. In some cases, the importing countries
request exporting countries to impose voluntary export restraints.
Agreement on a "voluntary" export restraint[edit]
In the past decade,
a widespread practice of concluding agreements on the "voluntary"
export restrictions and the establishment of import minimum prices imposed by leading Western
nations upon weaker in economical or political sense exporters. The specifics of these types of
restrictions is the establishment of unconventional techniques when the trade barriers of
importing country, are introduced at the border of the exporting and not importing country. Thus,
the agreement on "voluntary" export restraints is imposed on the exporter under the threat of
sanctions to limit the export of certain goods in the importing country. Similarly, the
establishment of minimum import prices should be strictly observed by the exporting firms in
contracts with the importers of the country that has set such prices. In the case of reduction of
export prices below the minimum level, the importing country imposes anti-dumping duty,
which could lead to withdrawal from the market. Voluntary" export agreements affect trade in
textiles, footwear, dairy products, consumer electronics, cars, machine tools, etc.
Problems arise when the quotas are distributed between countries because it is necessary to
ensure that products from one country are not diverted in violation of quotas set out in second
country. Import quotas are not necessarily designed to protect domestic producers. For example,
Japan, maintains quotas on many agricultural products it does not produce. Quotas on imports is
a leverage when negotiating the sales of Japanese exports, as well as avoiding excessive
dependence on any other country in respect of necessary food, supplies of which may decrease in
case of bad weather or political conditions.
Export quotas can be set in order to provide domestic consumers with sufficient stocks of goods
at low prices, to prevent the depletion of natural resources, as well as to increase export prices by
restricting supply to foreign markets. Such restrictions (through agreements on various types of
goods) allow producing countries to use quotas for such commodities as coffee and oil; as the
result, prices for these products increased in importing countries.
A quota can be a tariff rate quota, global quota, discriminating quota, and export quota.
Embargo is a specific type of quotas prohibiting the trade. As well as quotas, embargoes may be
imposed on imports or exports of particular goods, regardless of destination, in respect of certain
goods supplied to specific countries, or in respect of all goods shipped to certain countries.
Although the embargo is usually introduced for political purposes, the consequences, in essence,
could be economic.
Standards take a special place among non-tariff barriers. Countries usually impose standards on
classification, labeling and testing of products in order to be able to sell domestic products, but
also to block sales of products of foreign manufacture. These standards are sometimes entered
under the pretext of protecting the safety and health of local populations.
Administrative and bureaucratic delays at the entrance[edit]
Among the methods of non-tariff regulation should be mentioned administrative and
bureaucratic delays at the entrance, which increase uncertainty and the cost of maintaining
Import deposits[edit]
Another example of foreign trade regulations is import deposits. Import deposits is a form of
deposit, which the importer must pay the bank for a definite period of time (non-interest bearing
deposit) in an amount equal to all or part of the cost of imported goods.
At the national level, administrative regulation of capital movements is carried out mainly within
a framework of bilateral agreements, which include a clear definition of the legal regime, the
procedure for the admission of investments and investors. It is determined by mode (fair and
equitable, national, most-favored-nation), order of nationalization and compensation, transfer
profits and capital repatriation and dispute resolution.
Foreign exchange restrictions and foreign exchange controls[edit]
Foreign exchange restrictions and foreign exchange controls occupy a special place among the
non-tariff regulatory instruments of foreign economic activity. Foreign exchange restrictions
constitute the regulation of transactions of residents and nonresidents with currency and other
currency values. Also an important part of the mechanism of control of foreign economic activity
is the establishment of the national currency against foreign currencies.
The transition from tariffs to non-tariff barriers[edit]
One of the reasons why industrialized countries have moved from tariffs to NTBs is the fact that
developed countries have sources of income other than tariffs. Historically, in the formation of
nation-states, governments had to get funding. They received it through the introduction of
tariffs. This explains the fact that most developing countries still rely on tariffs as a way to
finance their spending. Developed countries can afford not to depend on tariffs, at the same time
developing NTBs as a possible way of international trade regulation. The second reason for the
transition to NTBs is that these tariffs can be used to support weak industries or compensation of
industries, which have been affected negatively by the reduction of tariffs. The third reason for
the popularity of NTBs is the ability of interest groups to influence the process in the absence of
opportunities to obtain government support for the tariffs.
Non-tariff barriers today[edit]
With the exception of export subsidies and quotas, NTBs are most similar to the tariffs. Tariffs
for goods production were reduced during the eight rounds of negotiations in the WTO and the
General Agreement on Tariffs and Trade (GATT). After lowering of tariffs, the principle
of protectionism demanded the introduction of new NTBs such as technical barriers to trade
(TBT). According to statements made at United Nations Conference on Trade and Development
(UNCTAD, 2005), the use of NTBs, based on the amount and control of price levels has
decreased significantly from 45% in 1994 to 15% in 2004, while use of other NTBs increased
from 55% in 1994 to 85% in 2004.
Increasing consumer demand for safe and environment friendly products also have had their
impact on increasing popularity of TBT. Many NTBs are governed by WTO agreements, which
originated in the Uruguay Round (the TBT Agreement, SPS Measures Agreement, the
Agreement on Textiles and Clothing), as well as GATT articles. NTBs in the field of services
have become as important as in the field of usual trade.
Most of the NTB can be defined as protectionist measures, unless they are related to difficulties
in the market, such as externalities and information asymmetriesbetween consumers and
producers of goods. An example of this is safety standards and labeling requirements.
The need to protect sensitive to import industries, as well as a wide range of trade restrictions,
available to the governments of industrialized countries, forcing them to resort to use the NTB,
and putting serious obstacles to international trade and world economic growth. Thus, NTBs can
be referred as a new of protection which has replaced tariffs as an old form of protection.
Looking Beyond Tariffs: The Role of Non-Tariff Barriers in World Trade
Chapter 1. Overview of Non-Tariff Barriers: Findings from Existing Business Surveys
Our knowledge of NTBs, of how to assess their effects and the extent to which they may restrict
trade is inadequate. Simply identifying the main non-tariff measures is a difficult task and data
collected by business surveys can make a contribution. This chapter compiles and analyses
findings from survey-based research that help identify barriers perceived by exporters from
various countries and regions in foreign markets. It also explores the extent to which different
surveys report the same types of barriers. Common areas of concern in many surveys are
technical measures, customs rules and procedures and, to a lesser extent, internal taxes or
charges and competition-related restrictions on market access.

Chapter 2. Import Prohibitions and Quotas
This chapter investigates two specific types of quantitative restrictions, namely import
prohibitions and quotas. It reviews information on these measures contained in the WTO Trade
Policy Reviews, WTO notifications and in various other trade reports. The aim is to contribute to
discussions, particularly on market access for non-agricultural goods, at the WTO or elsewhere.

The research reveals that the use of quotas and prohibitions for economic reasons has declined,
but most countries use prohibitions as part of their regulatory framework to protect human safety
and health or the environment, and the tendency appears to be increasing. Traders would benefit
if these measures were more transparent. Also, import bans hamper international trade in used
goods; their circumstances and appropriateness in terms of regulatory efficiency merit scrutiny.

Chapter 3. Non-automatic Import Licensing
This chapter looks at the nature and scope of non-tariff measures, specifically nonautomatic
import licensing, which is a means of controlling imports linked to compliance with specific
criteria. These schemes can be applied for a variety of purposes relating to both economic and
non-economic regulatory goals. The use of these measures has been evolving, and significant
reforms that have been undertaken over the years have changed the pattern of perceived
problems associated with them.

This chapter reviews and summarises on a country basis the information contained in the WTO
trade policy reviews, which generally permit identification of licensing measures used in
different countries and the broad product groups covered. It also looks at ongoing discussions at
the WTO on trade facilitation, highlighting the important link with import licensing.

Chapter 4. Customs Fees and Charges in Imports
This chapter examines the nature and the extent of the use of customs fees and charges that affect
imports at borders. It draws on data collected from WTO Trade Policy Reviews, non-tariff
barrier notifications to the Negotiating Group on Market Access (NAMA), and the UNCTAD
TRAINS database and country notes. It reveals that most types of customs fees and charges on
imports are applied ad valorem rather than on the basis of the underlying costs of the services

The use of customs fees and charges has evolved over time. The use of both customs surcharges
and consular invoice fees has declined markedly over the last two decades. More countries
nowadays charge importers fees for the use of various customs-related services.

Chapter 5. Export Duties
This chapter takes stock of the present situation for export duties (tariffs) under the GATT/WTO.
It clarifies the definition of export duties and examines existing disciplines at both multilateral
and regional levels. It analyses factual information on products subject to such duties drawn from
WTO Trade Policy Reviews (TPRs) and describes key findings. Export duties are mainly
imposed for fiscal reasons or as a means to restrict exports of particular products in order to
reserve the domestic supply for local industries and are applied mainly by developing countries
and least developed countries (LDCs). Aspects of possible rule-making on export duties are also

Chapter 6. Export Restrictions
This chapter provides an overview of current disciplines on export restrictions under the
GATT/WTO, including the scope of exceptions. Disciplines at the regional level are also
reviewed, and information provided by WTO Trade Policy Reviews (TPRs) on the use of
different types of export restrictions and the products affected is analysed. The chapter describes
some of the rationales for export restrictions and the nature of justifications invoked for
exceptions, in particular for economic reasons. It also considers whether current transparency
disciplines are sufficient in terms of predictability and whether there is room for strengthening
disciplines in this area, on either a horizontal or a sectoral basis.

Chapter 7. Non-Tariff Barriers of Concern to Developing Countries
This chapter identifies non-tariff barriers (NTBs) faced by developing countries in their trade
with developed countries and in South-South trade. The goal is to raise awareness of barriers that
interfere with the ability of developing countries to build up trade. Data collected and analysed
consist of the academic literature, notifications by developing countries to the Negotiating Group
on Market Access for Non-Agricultural. Products (NAMA) of the Doha Development Agenda
(DDA), business surveys, and records relating to trade disputes brought before the World Trade
Organization (WTO) and regional dispute settlement mechanisms.
Removing non-tariff barriers essential to help developing countries, new research shows

13 Nov 2012
Proliferation of western regulations are damaging developing countries
Barriers to prosperity.pdf
Developing countries need to focus urgently on the removal of non-tariff barriers if they are to
promote trade and growth according to a new study.
Barriers to prosperity developing countries and the need for trade liberalisation also argues
that there is an urgent requirement for the EU to remove protectionist import barriers erected
against poor countries.
The report finds that although tariff barriers are still a problem they are not as significant as non-
tariff barriers in stopping developing countries from moving into the export of higher value
added products such as processed foods.
Currently, developing countries often have a very low share of exports of final processed
products. For example, developing countries account for 91 per cent of raw coffee exports but
only 3 per cent of processed coffee exports. It is the export of these processed agricultural
products that provides the best opportunities for growth and development in many of the worlds
poorest countries.
Specific barriers identified in the research include:
EU rules of origin and rules relating to traceability.
The combination of such rules with preferential trade agreements which becomes more
onerous as the degree of processing of agricultural products increases.
Health and safety regulations.
Labelling schemes such as fair trade and organic.
Environmental standards, such as those relating to palm oil exports.
Export and import procedures imposed by developing countries themselves.
It is also likely that the existence of these barriers is pushing up the price of food in developed
Non-tariff barriers need to be brought to the forefront of the global trade debate and made a
priority by trade negotiators.
Developing countries need to remove their hugely bureaucratic non-tariff barriers to trade.
Currently, for example, exporters from India have to go through 12 separate bureaucratic
processes involving 10 separate agencies.
More reliable data on non-tariff barriers need to be collected in order to quantify their coverage
and the problems caused by them.
Developing countries also need to remove tariff barriers which are still prevalent in some
industries. India, for example, has a tariff barrier of 99 per cent on roasted coffee and Mexico
71 per cent.
Commenting on the report, Prof. Philip Booth, Editorial Director at the Institute of Economic
Affairs, said:
If world economic growth is not going to stall, we need to step up the momentum to remove
trade barriers. The bureaucratic obstacles to trade in developing countries serve no useful
purpose and simply keep the poorest people in the world poor.
In the West, we also need to do all we can to remove non-tariff barriers to trade. The EU needs
to begin to think globally rather than focusing its efforts on complex rules designed to promote
trade within EU countries themselves.

The chapter identifies the categories and types of measures that are most reported and the
products affected by the reported measures. Attention is also drawn to developing countries
forward-looking export strategies and related potential barriers. Overall, the chapter highlights
similarities and differences in NTBs reported in the data reviewed and compares NTBs reported
for trade with developed countries and for trade among developing countries.

The Member States of the three Regional Economic Organisations of the Common Market for
Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern
African Development Community (SADC) launched the COMESA-EAC-SADC Tripartite Free
Trade Area on 12th June 2011. The Tripartite Free Trade Area aims to reduce tariffs imposed on
goods originating in the region and traded in the region.
However, in addition to tariff barriers, the regions producers and traders also face a number of
Non-Tariff Barriers (NTBs). An integral part of the Tripartite Free Trade Area, therefore, is the
design and implementation of a programme aimed reducing Non-Tariff Barriers to trade.
Non-Tariff Barriers (NTBs) refer to non-tariff related trade restrictions resulting from
prohibitions, conditions or specific requirements that make importation and exportation of goods
difficult or expensive. The elimination of Non-Tariff Barriers was identified as a priority at the
First Tripartite Summit which took place in October, 2008.
Legal instruments of the three Regional Economic Communities namely; Articles 49 and 50 of
the COMESA Treaty, Articles 75(5) of the East African Community Treaty and Article 6 of the
SADC Protocol on Trade, provide for the elimination of Non-Tariff Barriers to trade and further
prohibit the introduction of new ones. Article 10(1) of the Tripartite Agreement calls on
Tripartite member States to eliminate all existing Non-Tariff Barriers to trade with other member
States and not impose any new ones.

COMESA, EAC and SADC have, in the past, developed different mechanisms to identify report
and monitor elimination of Non-Tariff Barriers and resolve disputes. These mechanisms have, to
a great extent, identified all the common NTBs encountered in the region and the frequency at
which they occur and has attempted to facilitate resolution of the same through resolution at the
Council of Ministers level and other consultative processes. The existing mechanisms that are in
place were the starting points for the design of the on-line Tripartite NTB Monitoring, Removal
and Reporting Mechanism, as well as the process for elimination of Non-Tariff Barriers to trade.
Related publications:
Factsheet | Non-Tariff Barriers
Related galleries:
NTBs meeting album
Related news feeds:
Non-Tariff Barriers
NTB reporting, Monitoring and Elimination Mechanism
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Non-Tariff Barriers or Disguised Protectionism
One of the most important objectives of establishing the General Agreement on
Tariffs and Trade (GATT) in the year 1947 was to achieve substantial reduction of
tariffs and other trade barriers i.e. the non-tariff barriers and thus to secure a freer
access to the markets.
As far as tariffs are concerned, a long distance has been travelled since then and
substantial reduction in tariffs has been achieved in the successive Rounds of trade
negotiations. By the end of the Tokyo Round of Trade Negotiations the tariffs in the
developed countries had been brought down to 6.3% on the industrial products which
would further reduce to 3.9% on a trade weighted average, by the end of the Uruguay
Round implementation period i.e. 1 January 2001.
It is, however, difficult to argue that the same success has been achieved on the front
of non-tariff barriers which is also evident from the fact that the recently concluded
Singapore Ministerial Conference has devoted more time and attention to the non-
tariff issues rather than to tariffs.
This Briefing Paper examines various non-tariff barriers maintained by some
countries, their impact on trade and how best they can be dealt with.
Any restriction imposed on the free flow of trade is a trade barrier. Trade barriers can either be
tariff barriers, that is levy of ordinary customs duties within the binding commitments
undertaken by the concerned country in accordance with Article II of GATT or non tariff
barriers, that is any trade barriers other than the tariff barriers.
The GATT Agreement envisages Most Favoured Nation (MFN) treatment to be accorded by
every Member to all other Members. Article II of the GATT Agreement prohibits levy of
ordinary customs duties, any other duties or charges in excess of those set forth and provided in
the schedule of concessions relating to the importing country and requires such duties or charges
to be levied on a non-discriminatory basis on imports originating from whatever source. Customs
duties at rates within the binding commitment can always be applied, as in the case of India
where the applied rates are mostly well below the binding commitments.
But, this lower rate has also to be applied uniformly on all imports on a non-discriminatory basis.
The only exception being a preferential treatment under a Regional Trading Arrangement or any
similar arrangement specifically permitted under the GATT. India is also a Member of various
preferential arrangements, notably the SAARC Preferential Trading Arrangement (SAPTA), the
Bangkok Agreement and the Global System of Trade Preferences (GSTP) etc. and accords
preferential treatment to imports from the respective Member countries.
Any levy other than the ordinary customs duties or charges as explained above will fall in the
category of non-tariff barriers.
Non-tariff barriers can take various forms. Broadly these can be categorised as under:

Import Policy Barriers
Standards, Testing, Labelling and Certification
Anti-dumping & Countervailing Measures
Export Subsidies and Domestic Support
Government procurement
Services barriers
Lack of adequate protection to Intellectual Property Rights
Other barriers
i) I mport Policy Barriers
One of the most commonly known non-tariff barriers is the prohibition or restrictions on imports
maintained through the import licensing requirements. Article XI of the GATT Agreement
requires Members not to impose any prohibitions or restrictions other than duties, taxes or other
charges, whether made effective through quotas, import or export licences or other measures.
Any form of import licensing (other than an automatic license) is, therefore, to be considered as
an import restriction.
Certain restrictions on imports, however, can be imposed in accordance with various provisions
of the GATT. These include restrictions on grounds of safety, security, health, public morals etc.
Article XX of the GATT Agreement provides for certain general exceptions on grounds of
protection of:
public morals,
human, animal or plant life or health,
national treasures of artistic, historic or archaeological value etc.
These are however subject to the requirement that such measures are not applied in a manner
which would constitute a means of arbitrary or unjustifiable discrimination between countries
where the same conditions prevail, or a disguised restriction on international trade. Similarly
Article XXI of the GATT Agreement provides for certain security exceptions.
Import restrictions on some items on grounds of safety and security are being maintained
generally by all the countries, and perhaps these cannot be considered as non-tariff barriers
looking to the purpose for which the restrictions are imposed.
Article XVIII (B) of the GATT allows import restrictions to be maintained on grounds of
Balance of Payment (BOP) problems. Presently only seven countries maintain import
restrictions on account of BOP problems. India is one of them. The others are: Bangladesh,
Nigeria, Pakistan, the Philippines, Sri Lanka and Tunisia.
Besides the import licensing, import charges other than the customs tariffs and quantitative
restrictions are the other forms in which import restrictions can be imposed through the import
Textiles is the most important commodity on which Indian exports face quantitative restrictions
in the form of MFA (Multi Fibre Arrangement) quotas in the main markets. MFA quotas have
been in force for about a quarter of century (since 1972). All textile items (including clothings)
under HS code 50 to 63, and some textile items falling under HS Code 68 or 93 are subjected to
MFA quotas. In the USA, one of the main markets for Indian textiles exports, more and more
items have been incorporated in the MFA quotas. So much so that since 1986, within six years
the MFA quota coverage has expanded six times from 16% to 95% by the year 1992.
Although quotas prima-facie may provide some satisfaction to the exporters by way of ensured
markets, these operate more dangerously to prevent growth of exports beyond quotas and the
importing countries conveniently use them as an effective tool to protect their domestic industry.
Another related issue in the context of MFA quotas is the new US Rules of Origin which have
resulted in some textile-visas being granted to non-originating goods.
Some agricultural products also suffer from quota regimes. Thailand maintains quota regime on
imports of Soyabean which has adversely affected Indias exports of oil meals which is a major
export to Thailand. Similarly Canada also maintains quantitative restrictions and import licensing
requirements for a variety of food and agricultural items.
Recovery of excessive service charges, disproportionate to the services rendered by the port or
customs authoorities also fall in this category. Notably Japan is one such case where Japanese
Customs charge small packaging carriers unreasonable fees for customs clearances of high
volume and low value shipments on the weekends and in the evenings.
ii) Standards, Testing, Labelling & Certifi-cation Requirements
Primafacie Standards, Testing, Labelling and Certification requirements are insisted upon for
ensuring quality of goods seeking an access into the domestic markets but many countries use
them as protectionist measures. The impact of these requirements is felt more by the purpose and
the way in which these are used to regulate the trade.
Two of the covered agreements under the WTO namely the Agreement on the Application of
Sanitary & Phytosanitary Measures (SPM) and the Agreement on Technical Barriers to Trade
(TBT), specifically deal with the trade related measures necessary to protect human, animal or
plant life or health, to protect environment and to ensure quality of goods.
The SPM Agreement gives a right to take sanitary and phytosanitary measures necessary for the
protection of human, animal or plant life or health, provided:
such measures are not inconsistent with the provisions of the Agreement;
they are applied only to the extent necessary;
they are based on scientific principles and are not maintained without sufficient scientific
they do not arbitrarily or unjustifiably discriminate between Members where identical or
similar conditions prevail including between their own territory and that of other
Members, and
they are not applied in a manner which would constitute a restriction on international
In regard to the determination of appropriate level of sanitary or phytosanitary protection, the
Agreement requires the objective of minimising negative trade effects to be taken into account.
Further, it permits introduction or maintenance of sanitary and phytosanitary measures resulting
in higher level of sanitary and phytosanitary protection that would be achieved by measures
based on the relevant international standards, guidelines or recommendations only if there is a
scientific justification. However, where no such international standards, guidelines or
recommendations exist or the content of a proposed sanitary or phytosanitary regulation is not
substantially the same as the content of an international standard, guideline or recommendation
and if the regulation may have a significant effect on trade of other Members a notice needs to be
published at an early stage and a notification is required to be made of the products to be covered
with an indication of the objective and rationale of the proposed regulation.
The TBT Agreement also contains similar provisions with regard to preparation, adoption and
application of technical regulations for human, animal or plant safety, protection of environment
and to ensure quality of goods.
Both the Agreements also envisage special and differential treatment to the developing country
Members taking into account their special needs. However, the trade of developing country
Members has often faced more restrictive treatment in the developed countries who have often
raised barriers against developing countries on one pretext or the other.
The Consumer Product Safety Commission (CPSC) and the Food and Drug Authority (FDA) in
the USA are responsible for ensuring quality of goods that enter the USA. Some of the instances
of restrictions imposed by them include:
Recall of Indian made ghagras (skirts) on grounds of non-conformity to flammability
standards. This item was ultimately brought under MFA quota regime.
Targetting of Indian rayon scarves on similar grounds of non-conformity to flammability
Automatic import alert in respect of Indian fresh and frozen shrimps on grounds of filth,
decomposition and presence of Samonella. This was extended even to cooked shrimps in
early 1995 by the FDA.
Targetting of Indian mangoes on the ground of presence of fruit fly and weavils.
In the case of the European Union (EU) reducing packaging waste and its impact on environment
is an important concern. The EU have issued a directive in December 1994 requiring packaging
materials to meet some technical standards, designed and produced in such a way to promote
their reuse, recycling and energy recovery and at the same time minimising their impact on
environment. In Germany, however the existing laws are still stricter which puts the onus of
disposal of waste on the wholesale distributors. All these measures definitely have a great
economic impact on developing countries exports to the EU Member countries.
Some of the other non-tariff barriers falling in this category are ban on import of goods (textiles
and leather) treated with azo-dyes and pentachlorophenol, ban on use of all hormones, natural
and synthetic in livestock production for export of meat and meat products, stipulation regarding
pesticides and chemicals residues in tea, rice and wheat etc., and requirement of on-board cold
treatment for fruits and vegetables exported to Japan.
Anti-dumping and countervailing measures are permitted to be taken by the WTO Agreements in
specified situations to protect the domestic industry from serious injury arising from dumped or
subsidised imports. The way these measures are used may, however, have a great impact on the
exports from the targetted countries. If used as protectionist measurs, they may act as some of the
most effective non-tariff barriers. The number of anti-dumping investigations in the recent past
have increased manifolds. Not every investigation results in the finding of dumping and/or injury
to the domestic industry. But the period for which the investigations are on, and this period may
be upto 18 months, the exports from the country investigated suffer severely. Anti-dumping and
countervailing duties being product specific and source specific the importers well prefer
switching over to other sources of supply.
In some cases the authorities apply innovative methods to prolong the investigation. A recent
practice adopted by the European Commission is a case in example. The European Commission
has terminated anti-dumping investigation following withdrawal of the complaint in two cases
namely unbleached cotton fabrics from India and others (20th February 1996) and bed-linen
from India and others (9th July, 1996), after nearly two years without concluding the
investigation, and started fresh investigations immediately after the termination of the two
investigations on 21st February, 1996 and 16th September 1996 respectively. It may be a matter
of debate whether the European Commission was within their rights to do so but the impact of
these decisions is grave on exports of these item from the concerned countries.
Another aspect concerns the quantum of duty levied. The WTO Agreements on Anti-dumping
and Countervailing duties permit the importing countries to impose full margin of dumping and
subsidisation as anti-dumping duty or countervailing duties but recommends levy of lesser
amount as duty if such lesser amount is adequate to remove the injury to the domestic industry.
In other words the Agreements recommend that the amount of duty imposed should be such as is
adequate to remove the injury to the domestic industry as any amount in excess of that would
only provide an undue protection to the domestic industry. While in India, the European Union
and some other countries the lesser duty rule is applied, in the case of USA, Canada, and some
other countries, the full duty rule is applied which can well be considered as a non-tariff barrier.
Both export subsidies and domestic support have a great bearing on the trade of other countries.
While export subsidies tend to displace exports from other countries into the third country
markets, the domestic support acts as a direct barrier against access to the domestic market.
Generally the developing countries can hardly find resources to grant subsidies or domestic
support. But developed countries like the Members of the European Union and Japan have been
heavily subsidising their agricultural sector through schemes like export refunds, production
support system and other intervention measures.
Under the Common Agricultural Policy, the EU subsidises European farmers upto $4bn every
year, which end up mostly into the pockets of rich land lords who really do not need it. In 1992,
Ray MacSharry, EUs agriculture commissioner, calculated that 80% of the subsidies went to the
richest 20% of farmers. For example, Queen Elizabeth receives annually $352,000 for her
Sandringham estate, and her daughter Anne recieves $128,000 annually for her Gatcombe Park
farm. Even Arab princes owning estates in UK are receiving these doles. Saudi Prince Khalid
Abdullah al Saud claimed $192,000 for his country estate in Kent. (Asian Wall Street Journal, 11
December 1996).
Government procurement and bulk procurement policies followed by some of the countries act
as a non-tariff barrier. Notably, Japan follows peculiar purchasing practices in the Government
sector which are neither transparent nor uniform. Similarly the UAE and Saudi Arabia maintain
preferential buy-national policies giving a preference to local products in the governmental
purchases or insist on a certain percentage of sub-contracting in favour of locally owned firms.
Some of the measures which fall in this category include restrictive visa regime maintained by
the USA which act as a severe restriction to Indias services exports, the local sponsorship
requirement for visas for Saudi Arabia, the special measures Law concerning the handling of
legal business by foreign retainers in Japan and restriction on issue of licences to the foreign
professionals in service areas like accounting, architecture, engineering and legal services etc. in

vii) Lack of Adequate Protection to I ntellectual Property Rights
Lack of adequate protection to Intellectual Property Rights in some countries hurts the exports of
other countries. For example, piracy of motion pictures, video cassettes, audio cassettes,
computer software etc. is widely practised in some of the Gulf countries, which affects Indian
exports of these items.
viii) Other Barriers
Some of the other main non tariff barriers are discriminatory on account of use of child labour,
investment barriers, language barriers, Super and Special 301 measures under the Omnibus
Trade Act by the USA etc.
Use of child labour is increasingly growing as a serious concern in many countries. Carpets and
sports goods have often faced criticism mostly from the non-governmental organi-sations for use
of child labour. In the Indian context it may be mentioned that the Indian Laws do not permit
child employment in the industrial sector, particularly in hazardous sectors. The cottage industry
is mostly run by joint families where skills travel down the generations through the participation
of family members including children. Even in cases where child labour is employed
commercially, the choice is clearly between letting the child somehow earn his livelihood or to
let him live a miserable life. There is, therefore, a need to find a solution taking all these aspects
into account rather than simply creating an awareness against use of goods made with child
While tariffs having been already brought down substantially in the Uruguay Round, the future
efforts are more likely to concentrate on the non-tariff issues.
It is not true that the non-tariff measures are entirely unnecessary. The WTO Agreements permit
the Members to take measures to protect human, animal or plant life or health, to conserve
natural resources or to ensure the quality of goods finding an access in their markets. Members
can also in certain circumstances take specified action to protect their domestic industry. The
non-tariff measures act as barriers if they are applied as protectionist measures in a disguise. The
non-tariff measures need, therefore, to be examined for their consistency with the WTO
disciplines and whether they are applied as a protectionist measures in a disguised form or
If a country feels that non-tariff measures taken against its exports are inconsistent with the
WTO provisions, it may take the matter to the WTO dispute settlement mechanism, besides
seeking bilateral consultations. WTO provisions, however, do not cover all areas and, therefore,
some difficulties may be experienced where WTO provisions do not exist. Even where the
measures are consistent with the WTO provisions, most of the agreements envisage special and
preferential treatment for the developing country members. Bilateral consultations can perhaps
help a lot in this regard.

Some of the non tariff barriers can be tackled by the exporters themselves by
ensuring that they adhere to quality and standards requirements of the importing
countries. For this purpose they need to plan production and packaging methods
specially for the export markets.
The manufacturing techniques used must be carefully selected so as to
ensure that the resultant products do not cause any harm to human, animal
or plant life or health.
The exporters need to carefully study the laws and regulations of the
importing countries and their likely impact on the exports. Similarly they
should also carefully examine the notices or notification made by the
importing countries under the Agreement on Application of Sanitary and
Phyto-Sanitary measures and the Agreement on Technical Barriers to
The exporters should maintain an effective interaction with their
counterpart associations etc in the importing countries. Any difficulties
due to technological or economical limitations must be adequately
brought forward to the notice of the Government. Most of the WTO
Agreements envisage special and preferential treatment to developing
countries. Specific problems being faced and the favour required should
therefore, be identified. This may help the Government to have effective
bilateral consultations with the concerned countries and to seek specific
Since any dispute in the WTO can be raised by the Governments only, the
exporters will do well to fully cooperate with their Government and to
provide it with all the necessary information through their association etc.

CUTS, This Briefing Paper has been researched and written by Mr R. K. Gupta,
Director, Ministry of Commerce, Government of India, New Delhi

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Copyright 1997; Consumer Unity & Trust Society (CUTS)
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Southern African

A Non-Tariff Barrier is any obstacle to international trade that is not an import or export duty.
They may take the form of import quotas, subsidies, customs delays, technical barriers, or other
systems preventing or impeding trade. Over time, the private sector throughout the Southern
African Development Community (SADC) region has identified non-tariff barriers that restrict
trade among Member States.
SADCs Protocol on Trade requires Member States to implement measures eliminating all
existing non-tariff barriers and to refrain from adding any new ones.
Examples of Restrictions
Quota restrictions are not allowed under SADCs Protocol on Trade. Ideally, any Member State
is free to import or export any amount of goods it chooses from other Member States. While
certain quota restrictions persist from before 2000, Member States are committed to reducing
these restrictions, under Article 7 of the Protocol on Trade.
Occasionally, certain non-tariff barriers arise for logistical reasons not intended to restrict
imports. Many SADC members are land-locked, which forces goods to cross many national
borders during transit to destination. Customs delays caused by this situation constitute a non-
tariff barrier. In order to ease this situation, SADC has promoted membership in a Customs
Union, which unites all Member State customs policies, thereby reducing delays at border
Sugar Agreement and Accepted Barriers to Trade
Special cases apply to certain goods, namely sugar. Because the sugar industry in
certain Member States is uniquely volatile, SADC recognises that Member States would not
benefit from the artificially-low market thatFree Trade of sugar would create. As a result,
the Protocol on Trade contains the Sugar Agreement, which allows sugar-producing Member
States duty-free access to members of the Southern Africa Customs Union but does not require
similar duty-free access to their markets in return.
This situation offers short-term support to sugar producers as they establish a competitive
industry within their borders. The long-term plan for the Sugar Agreement is to remove barriers
to trade by 2012.
Sanitary and Phytosanitary Measures
Import and export restrictions put in place to preserve the health of humans, animals, and plants
known assanitary and phyto-sanitary measures can become a non-tariff barrier when
incorrectly applied for the purposes of market protection, rather than health and welfare. The
SADC Protocol on Trade sets out specific solutions for sanitary and phyto-sanitary measures that
do not obstruct legitimate trade.
Recent Developments
In 2005, SADC introduced a process for identifying and eliminating non-tariff barriers. As part
of this process, the SADC Secretariat developed a mechanism in conjunction with
the Common Market for Eastern and Southern Africa and the East African Community to
ensure disputes over non-tariff barriers can be addressed online, allowing for timely resolution.
Tradebarriers.org is an online portal for information related to non-tariff barriers in Africa,
offering current documentation and notification of trade barriers, and the steps governments are
taking to address them. In addition to enhanced transparency, Tradebarriers.org also provides a
web-based reporting and monitoring system that enables interested parties to cooperate in
identifying barriers to trade in Africa, and to contribute to their elimination, improving a
beneficial or positive trade environment for everyone. To find out more, visit tradebarriers.org.
Estimating the Price Effects of Non-Tariff Barriers
Judith M. Dean, US International Trade Commission
Robert Feinberg, American University
Jose Signoret, US International Trade Commission
Rodney D. Ludema, Georgetown University
Michael Ferrantino, US International Trade Commission
As multilateral negotiations focus more on reductions and removal of non-tariff barriers (NTBs),
the importance of quantifying the impact of these barriers has increased. Recent studies have
derived ad valorem equivalents for NTBs for a large number of countries and/or products, but the
derivation has been indirect, due to either lack of price data or NTB incidence measures. This
paper uses city level retail price data to directly estimate the average impact of core NTBs on
prices of 47 consumer products, grouped into four separate sectors, for more than 60 countries in
2001. The analysis uses both government self-reported data and a new database of private sector
complaint data to assess NTB incidence. A differentiated products model is used to capture
imperfect substitutability between products. With city level price data-- including both inter- and
intra-country price differencesa more precise distinction can be made between the impact of
NTBs and the impact of local distribution costs in raising price. The model is estimated using an
instrumental variables approach to incorporate the endogeneity of NTBs. Results suggest that
core NTBs are still highly restrictive in many countries and for many traded goods. While NTBs
appear to be complements to tariffs, in some sectors the presence of a tariff reduces the price
impact of the NTB. Results also suggest that in some sectors, the restrictiveness of NTBs is
highly correlated with country income.