UNCTAD - World Bank joint event on the (Un)seen impact of Non-Tariff Measures

Excellencies,

Distinguishes delegates,

Ladies and gentlemen,

A warm welcome to our joint UNCTAD-World Bank seminar on an issue that has become central to trade discussions: Non-tariff Measures or NTMs.

Two trends make NTMs very important.

First: Over the last decades, tariffs have been reduced while the number and importance of NTMs have constantly increased. In particular, there has been a steady rise in measures such as Sanitary and Phytosanitary measures (SPS) and Technical Barriers to Trade (TBT) that protect health, safety and the environment.

This is partly good news. We all want to have safe products. In fact, according to an UNCTAD and ESCAP report, 40 per cent of all NTMs are directly and positively linked to the Sustainable Development Goals, especially SDG 3 on Good Health and Wellbeing.

But NTMs are also a challenge for producers and traders, in particular smaller producers in lower-income countries. They have to comply with an ever increasing number of complex regulations. UNCTAD has shown that LDCs lose 14 per cent of exports to developed countries because of their lack of capacity to comply with NTM requirements.

NTMs are thus associated with important benefits and costs, calling for thorough analysis on their impact on sustainable development. Data collected by UNCTAD, the World Bank and other partners allow such analysis thanks to the ability to shed light on very specific measures and their effect. For instance, the World Bank recently conducted a study which showed that a reform of a port of entry restriction in Indonesia could reduce food prices by 11 per cent.

Now on the second, more recent trend: NTMs appear to shape a new trade policy landscape. The trading system is undergoing a significant transformation due to changing economic, environmental and geopolitical dynamics.

During the COVID-pandemic, within only one year, 208 NTMs were implemented, most of them export restricting measures. The disruption of supply chains triggered a wider discussion about dependencies related to global trade integration.

In the context of the food, energy and finance crises and the efforts to mitigate climate change and geopolitical tensions, NTMs are increasingly used to achieve not only trade but also non-trade policy objectives.

What these trends show is that we need more monitoring and transparency, and a better understanding of the various effects of NTMs.

UNCTAD has been working on NTMs since the 1980s. In 2006, the then Secretary-General established a group of eminent persons on non-trade barriers, including prominent names such as Alan Deardorff, Anne Kruger and Alan Winters.

The first task given to UNCTAD was to update an older classification of NTMs. Together with the World Bank, FAO, IMF, ITC, OECD, UNIDO and the WTO we developed the International Classification of NTMs which UN member States then adopted.

The second task was to collect NTMs data. We coordinate this task in collaboration with many partner countries and partner agencies. In 2014, UNCTAD and the World Bank launched the top 25 major traders project. This was a game changer as it enabled a much wider coverage. Today, our TRAINS and WITS database cover more than 95 per cent of world trade.

The fruits of this transparency are remarkable. I want to highlight three points:

First, research adds tremendously to the understanding of the effects of NTMs on developing countries, the environment and social aspects such as gender equality.

Second, the database supports policymakers in international regulatory cooperation and domestic coherence.

And third, the database provides trade intelligence on export markets to traders. This is very valuable. A good example is the Global Trade Helpdesk - a joint ITC, UNCTAD and WTO initiative – which provides the private sector access to trade information.

Dear friends, colleagues,

The importance of NTMs as a trade policy tool has been growing. Often, NTMs are more costly than tariffs, and at times used beyond trade objectives. It is thus an instrument that must be carefully looked at and monitored so that its positive potential can be maximized.

Before closing, I would like to thank colleagues in UNCTAD and at the World Bank who have driven this work forward. There is still much that can be learned but also, and importantly, gained for development.

I thank you for your attention.