Non Tariff Measures
UNCTAD
United Nations Conference on
Trade and Development
What are Non-Tariff Measures?
Non-tariff measures (NTMs) are policy measures,
other than ordinary customs tariffs, that can
potentially have an economic effect on
international trade in goods, changing
quantities traded, or prices or both”
• Too Broad, thus uninformative!
So we need a Classification
A
SANITARY AND PHYTOSANITARY MEASURES
B
TECHNICAL BARRIERS TO TRADE
C
PRE-SHIPMENT INSPECTION AND OTHER FORMALITIES
Non Technical
Measures
D
E
F
G
H
I
J
K
L
M
N
O
CONTINGENT TRADE PROTECTIVE MEASURES
NON-AUTOMATIC LICENSING AND QUANTITY CONTROL MEASURES
PRICE CONTROL MEASURES, ADDITIONAL TAXES AND CHARGES
FINANCE MEASURES
MEASURES AFFECTING COMPETITION
TRADE-RELATED INVESTMENT MEASURES
DISTRIBUTION RESTRICTIONS
RESTRICTION ON POST-SALES SERVICES
SUBSIDIES
GOVERNMENT PROCUREMENT RESTRICTIONS
INTELLECTUAL PROPERTY
RULES OF ORIGIN
Export
Measures
P
EXPORT RELATED MEASURES
Technical
Measures
NTM or not?
Is there a trade policy behind?
YES
•Import prohibitions / bans
•General or product-specific quotas
•Rules of Origin
•Sanitary and phyto-sanitary conditions
•Determination of eligibility
(geographical)
•Import licenses
•State subsidies, procurement
•Export subsidies
•Voluntary Export Restraints
•Foreign exchange market controls and
multiplicity
NOT, or maybe not a policy that
is implemented for trade
purposes…
•Misaligned currency
•Inadequate infrastructure
•Intellectual property laws
•Employment law
•Occupational safety and health
regulation
•Corrupt and/or lengthy customs
procedures
What kind of data do we have?
• Old data from
– UNCTAD… http://wits.worldbank.org/wits/
– AMAD database
• Some type of NTMs are somewhat covered by other
databases
–
–
–
–
Contingent protection (WTO – Bown)
Standards (some databases, MRL, USDA)
Subsidies (OECD, World Bank)
Quotas, TRQ. (ITC)
• Fragmentary data from sector studies.
• Some NTM data is available for some countries
– EU, Japan
Who needs this data?
Different Researchers - Different Data Needs
• “Model” Economist does not care much about the data.
– Produces neat models, which cannot be tested for NTMs.
• “Chef” Economist takes the data and cooks it.
– Does something with whatever data is available – but takes
assumptions and calculates standard errors
• “Undercover” Economist doesn’t trust other data but his.
– Painstakingly observes and collects, but can investigate only one little
thing in detail. His results cannot be easily generalized.
Lack of data results in, crippled research, often inconclusive or
not convincing. Specific results cannot be easily generalized.
NO DATA = NO ANALISYS = NO POLICY
NTM Data collection - TNT
• WHY? Provide free access to the trade and trade policy
data
– Increase transparency
– Facilitate research and analysis
– Improve awareness
• HOW?
• Short term strategy
– Consolidate all existing data
– Collect data
– Make data comparable
• Long term strategy
– Improve notification mechanisms
– Incentivize self sustaining data reporting
Use of NTM
High Income
TBT
SPS
PSI
Quant. Control
Price Control
TBT
Africa
SPS
PSI
Quant. Control
Price Control
TBT
Asia
SPS
PSI
Quant. Control
Price Control
Latin America
TBT
SPS
PSI
Quant. Control
Price Control
0
0.1
0.2
0.3
Frequency Index
0.4
0.5
Coverage Ratio
0.6
0.7
Implications for Trade Analysis
– NTM often add to the costs of trading
• Information and Compliance
– These costs are often not equal across
countries
– May create discrimination
• Some countries may benefit relatively to others
• Some firms (large, vertically integrated) may
benefit more
– Often advantages to who has better information
and is more cost efficient in complying with NTM.
How to measure the impact of NTM
on prices and trade costs
Impact of some NTMs more easy to quantify than others.
Methods include:
• Price gaps
• Ad Valorem equivalents
• Ad hoc studies
• These price effects are then used in economic models to
assess their impact on welfare, employment etc.
NTM trade restrictiveness (AVE)
35.0
30.0
OTRI
25.0
20.0
15.0
10.0
5.0
0.0
Total
Ag.
High income
Mfg.
Total
Ag.
Mfg.
Middle income
Tariff
Non-Tariff
Total
Ag.
Mfg.
Low income
What are the purposes of NTM?
•
•
•
•
Protect consumers / environment (SPS TBT)
Regulate domestic markets (Pricing, Licenses)
Protect domestic firms (AD, subsidies, quotas)
Avoid unintended spillovers (RoO)
Many NTM are legitimate and are there to stay
(cannot be negotiated away). Still, NTM may
have large effects on trade.
Not only costs but also benefits
• Many NTM have beneficial effect
– At least that is the reason they are supposed to
be there
• Question is how to integrate not only costs
but also benefits of NTM in modeling.
– Detailed studies on NTM are based on costbenefit analysis
Most NTMs are SPS and TBT
• Specifics modeling issues
– Cost benefit framework
– Bilateral effects may vary:
• Harmonization
• Mutual Recognition
– Enforcement / Implementation mechanisms
• A lot of devils in the details
Thank you