You are here: Home » Opinion » Columns
Business Standard

T S Vishwanath: Barriers to development

Non-tariff trade barriers aimed at protecting public health can be used by political incumbents to support domestic workers

T S Vishwanath 

Non-tariff measures, or NTMs, have long distorted global trade and have been an anathema to the process of multilateral or bilateral negotiations for opening up markets. The latest report from the World Trade Organisation (WTO) shows several are based on the Agreements on Sanitary and Phytosanitary Measures (SPS) or Technical Barriers to Trade (TBT).

While several of these measures are rightly used to protect public health, the report says that can also be utilised by political incumbents to protect domestic producers.

One area that has witnessed a proliferation of is the food sector. Food safety measures, the report states, have proliferated as a tool to respond to challenges arising from the need to protect animal, plant and human life. This has led to a rise in across continents. As a result, various approaches to mitigate possible negative trade impacts, such as harmonisation of standards as well as equivalence and commitment to a set of rules, are receiving widespread attention among the members of the multilateral body.

The report states that the data on notifications show an increasing use of TBT/measures since the mid-1990s. The rise in the incidence of TBT/measures is reflected in an increase in the number of specific trade concerns raised by members in the and committees. measures used by countries include quarantine requirements, restricting entry through a few ports to enforce measures and fixing minimum residue levels that have to be based on scientific risk assessment.

The report, quoting from the evidence from surveys conducted by the International Trade Commission (ITC), suggests that TBT/measures are the most burdensome for developing countries’ exporters. In 2010, close to 50 per cent of the perceived as burdensome by exporting firms were TBT/measures.

Ninety four per cent of specific trade concerns regarding measures and 29 per cent of those regarding are related to agriculture. Evidence from disputes also shows a greater number of citations of the and agreements in cases involving agricultural products than in other cases, the report said.

An important objective of the agreement has been harmonisation of standards to help countries make trade easier, but the mutual recognition agreements have proved challenging to negotiate.

Also, given the different standards prevalent due to differing levels of development in different countries, harmonisation of standards has been very difficult to practise. The Codex Alimentarius Commission, which, for instance, helps harmonise standards across countries, only has recommendatory status — which means that in several instances countries chose to have a higher or lower standard. What is really important for countries is to ensure that they move towards harmonisation using the international benchmark like Codex so that trade can be enhanced despite the myriad of regulations across the globe.

On a positive note, the report states that while regulatory standards restrict trade in agricultural products, the existence of standards often has a positive effect on trade in manufactured products, especially in high-technology sectors.

have been part of trade for many years. Though countries across the globe have been bringing down tariff barriers through regional and bilateral trade agreements, besides negotiations, they have been unable to tackle successfully.

The only sector that tried to address the issue has been the auto sector. It used to hold a regular dialogue on Geneva to address this issue. However, there is a need for some important initiatives from countries across the world.

The report identifies several challenges for international cooperation, and the more specifically, and then suggests some steps to tackle the issue.

First, it seeks to improve transparency in the adoption of non-tariff measures. The hopes that the newly created database I-TIP (Integrated Trade Intelligence Portal) will help improve transparency. Second, it calls for more effective criteria to identify why a measure is used. Third, it states that an increase in global production chains seeks deeper integration and regulatory convergence. Finally, it lays stress on capacity building as being vital to improving international cooperation. A combination of these measures is needed to boost trade.

The writer is Principal Adviser with APJ-SLG Law Offices

First Published: Thu, August 02 2012. 00:18 IST