unctad.org | Impact of non-tariff measures need to be addressed, says UNCTAD
Impact of non-tariff measures need to be addressed, says UNCTAD
29 June 2012
In a panel discussion at the 15th Annual Conference on Global Economic Analysis organised by GTAP (Global Trade Analysis Project) of Purdue University at the Geneva International Convention Centre on 28 June, UNCTAD representatives raised concerns about the wide array of non-tariff measures and policies currently in place which have restrictive and distortionary effects on international trade and impose disproportionate costs on poorer developing countries.

Mr. Guillermo Valles, Director of UNCTAD's Trade Division, and Mr. Alessandro Nicita of the Division's Trade Analysis Branch, noted that international trade is increasingly regulated by non-tariff policies. The non-tariff measures include a wide array of measures -- quotas, price administrations, anti-dumping, safeguards, technical regulations and standards, among many others.

Research by UNCTAD and elsewhere suggests that many of these policies have a large impact on the cost of trading. Many of these policies have a much higher restrictive effect than traditional tariffs. Some non-tariff measures (NTMs) have distortionary effects as they impose disproportionate costs on poorer developing countries, the UNCTAD representatives pointed out. A major concern is that the system of preferences favouring developing countries, especially LDCs, may be very much counterbalanced by the impact of NTMs.

They urged that analysis of trade policy needs to go beyond that of traditional market access. Although tariffs may be still important in many cases, preferential schemes and even regional trading arrangements (RTAs) may have little value if these agreements do not address issues related to NTMs. Governments need to be aware of what are the trade barriers and regulations that prevail in potential export markets and which of these policies are most restrictive so that negotiations can be centred in removing those of higher priority.

UNCTAD has urged that transparency be increased through the availability of more data information. That is, collecting, organizing and disseminating data related to NTMs with the objective of increasing awareness and providing information to policymakers on the constantly changing trade policy landscape. It is also necessary to increase understanding of the impact of NTMs on trade, competitiveness, and overall economic growth through more research and analysis. The UNCTAD Secretariat feels a better understanding of the impact of NTMs on international trade is important in the wider effort of leveraging trade for more sustainable and inclusive economic growth.

Since the early 1990s, UNCTAD has been collecting and disseminating information on trade, tariffs and prevailing NTMs. Subsequently, UNCTAD pooled resources with other organizations to provide more information with better access for researchers, policymakers and exporters. With inputs from many other agencies, including the International Trade Centre (ITC) and the WTO, UNCTAD developed a new NTMs classification. This classification was recently adopted both by UNCTAD and the WTO.

The classification is tailored to serve two main purposes:

(a) to better identify and distinguish - and therefore analyze - NTMs and

(b) to facilitate data collection and notification mechanisms.

UNCTAD is currently training developing-country researchers to collect information on NTMs and to improve capacity in analyzing the implications of NTMs. This work is being done in collaboration with a number of international organizations, including ITC, the World Bank and African Development Bank. The objectives of this partnership are to generate and freely disseminate up-to-date information on trade policy, as well as to build capacity in developing countries to collect, report, and analyze information on NTMs. The data collected through this exercise will be part of the UNCTAD TRAINS (Trade Information System) database and made freely available to all through the UNCTAD/World Bank dissemination portal “WITS” (World Integrated Trade Solutions).

A number of policy papers on the impacts and effects of NTMs, especially from a developing country perspective, have been produced. The most recent UNCTAD paper on NTMs is titled: “Non-Tariff Measures: Economic and Policy Issues for Developing Countries”, and will be published soon. This is a non-technical report which provides insights on: incidence of NTMs, quantification methods, the importance of regulatory transparency, the importance of improving data collection and effective reporting mechanisms. It also deals with designing proper policy responses to streamline and harmonize NTMs. Finally, the report provides a comprehensive review of the empirical literature on the effects of NTMs on developing countries' trade. An intergovernmental experts meeting is being planned for next year to discuss these issues.

The UNCTAD Secretariat sees increased transparency and better understanding of trade policy as important issues not only for the present economic situation, but also for the future. UNCTAD aims to continue improving data collection and dissemination, and to strengthen its research and analysis, so as to ultimately improve technical assistance on issues related to NTMs. It also seeks to improve collaboration with other international and regional organizations and agencies. It is confident that this work will lead to a better understanding of the effects of all forms of trade policy. This will benefit directly all negotiating processes, and ultimately will also help developing countries to fully benefit from their integration into the world economy.

Representatives from the business community, ITC and WTO also participated at the GTAP panel discussion on NTMs that was held on 28 June.



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