NTBs Under NAMA Negotiations
A South Asian Perspective
By
CUTS-CITEE Research Team
Pranav Kumar
Simi T B
Chandan Mukherjee
Presentation Coverage
• Theory
– Definition, Classification & Measurement Problems
• NTBs in Multilateral Trade Negotiations
– Tokyo, Uruguay and Doha Round
• Progress on NTBs Negotiations in Doha Round
– Approach, Notification
• Notification by South Asian Countries
– India, Pakistan and Bangladesh
• Composition of Mfg. Exports from South Asia
Definition of NTBs
• Baldwin (1970), Walter (1972), Mayer & Gevel (1973),
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and Deardorff & Stern (1997) have provided their
definitions to NTBs.
UNCTAD, OECD, PECC too contributed in formulation
of the term NTBs
No legal definition of NTBs in WTO Agreements
NTB are measures, other than tariffs, that are
connected with state (administrative) activity and
influence prices, quantity, structure and/or direction of
international flows of goods and services as well as
resources used to produce these goods and services.
Non-tariff Measures (NTMs) Vs.
Non-tariff Barriers (NTBs)
• For several countries both NTB and NTMs are mere
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synonymous terms, for others these two are quite different.
As per OECD, NTMs are defined as policy measures that have
the effect of limiting trade, with no implied judgment on the
legitimacy. Whereas, NTBs are defined as instruments that are
in violation of WTO law.
The raison d'être for using the term ‘measure’ instead of
‘barrier’ is primarily due to the reality of few cases where
policies that stimulate the volume of trade rather than retard
trade, such as exports subsidies, cannot be held as a barrier. A
barrier means prevention of something, now here it is the
trade.
Classification of NTBs
• UNCTAD’s Coding System of Trade Control Measures
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is the most comprehensive classification system
At its most detailed level, the classification identified
over 100 different types of NTBs at its most detailed
level though it does not incorporate any measures
applied to production or to exports.
This classification comprises of six categories/chapters
of NTBs, including price control measures, finance
measures, automatic licensing, quantity control
measures, monopolistic measures and technical
measures.
These chapters on NTBs begin from chapter 3 to
chapter 8, while chapter 1 and 2 are on tariff and
Para-tariff measures.
Measurement of NTBs
• Frequency-type measures
– QRs and similar specific limitations
– Non-tariff charges and related policies
– Govt supports and other restrictive practices
– Customs and administrative procedures
– Technical barriers to trade
• Price-comparison measures
• Quantity-impact measures
NTBs in Multilateral Trade Negotiations
• In Tokyo Round, there was a comprehensive
effort to reduce trade obstacles stemming from
tariffs and NTMs
• New or reinforced agreements called “codes,”
were reached on the following NTMs:
– subsidies and countervailing duties;
– government procurement;
– technical standards;
– import licensing procedures;
– customs valuation; and
– antidumping.
NTBs Negotiations Under Uruguay
Round
• WTO (URA) does not ban the use of all NTMs
• In many ways URA on NTMs are an ext. of
Tokyo Round
• Binding multilateral agreements signed on AD,
subsidies, SPS, TBT, safeguards, MFA etc.
• The objective was to discipline and allow only
legitimate NTMs
• UR results see a reduction in the use of some
important NTMs – ERAs, QRs, export subsidies
etc.
Doha Mandate on NTBs
• Seeks reduction or elimination of NTBs in
particular on products of export interest to
developing countries
• Elaborated further in July Package and Hong
Kong Declaration:
 Notification
 Identification
 Examination
 Categorisation
 To begin negotiations
Progress on NTBs Negotiations
• Tariff reduction has been the main thrust area, discussion on NTBs has received less
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attention
At the WTO General Council meeting in July 2004, Members reiterated the
importance of NTBs to the NAMA negotiations in the Annex B The agreement reads
as follows:
"We recognise that NTBs are an integral and equally important part of these
negotiations and instruct participants to intensify their work on NTBs. In particular,
we encourage all participants to make notifications on NTBs by 31 October 2004 and
to proceed with identification, examination, categorization and ultimately
negotiations on NTBs. We take note that the modalities for addressing NTBs in these
negotiations could include request/offer, horizontal, or vertical approaches; and
should fully take into account the principle of special and differential treatment for
developing and least-developed country participants."
32 WTO Members submitted notifications, 19 of which are developing countries. So
far only three African countries (Egypt, Kenya, and Senegal), and one LDC
(Bangladesh) have submitted notifications.
Following this, the WTO Secretariat provided compilations of the proposals submitted
regarding NTBs. The compilation, dated 29 October 2004, consolidated 26
submissions and distilled three central issues for discussion: whether to address the
broad range of NTMs identified or whether to limit the focus; the appropriate WTO
Committee or negotiating group in which to address the NTBs; and the appropriate
modalities (in other words, methodology) for negotiation of NTBs.
Notifications from South Asia
• Till February 2006, countries like Japan, Korea, US, Argentina,
Croatia, US, Cuba, Egypt, India, Mexico Singapore, Taiwan,
Bulgaria, Norway, Venezuela, Hong Kong and some others have
made notifications to the WTO on NTBs.
• The notifications are mostly in the areas/sectors like
automobiles, chemicals, electrical, energy, environmental
goods, fish and fish products, LAB foods, forest products, LAB
Generic, Health and safety, REG Leather, Minerals, Petroleum,
Pharmaceuticals, Phyto sanitary and textiles. The notifications
are submitted to technical Barriers to Trade
(Agreement/Committee), NGMA, Sanitary and Phytosanitary
(Agreement / Committee), Negotiating group on Rules and
others.
• From South Asia – India, Bangladesh and Pak have notified
Notification from India
India has submitted notifications on NTBs along
with other countries to the NGMA. India in its
submission has stated that restrictive
standards, burdensome regulations and
procedures in several countries have been
acting as barriers that significantly affect
exports as also the capacity to trade. Several
issues are involved with the NTBs; some of the
measures clubbed together affect individual
consignments, while some like those involving
costs put additional burden on exports.
Notification from Bangladesh
Regarding the inventory of non-tariff barriers,
the authorities of Bangladesh gathered
information from Chambers, associations and
individual exporters. The NTBs faced by
exporters are of different nature, and are
categorised in the following broad areas:
(a) NTBs similar to SPS measures; (b) NTBs
related to TBT measures; (c) Quantitative
restrictions including ban; (d) Labeling
requirement; (e) Rules of Origin; (f) Visa
requirement
Notification from Pakistan
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Notifications put forward by Pakistan to the Negotiating group on market
access for the NTBs faced by its exporters includes:
Due to the pre-shipment inspection required by certain countries for certain
goods, shipments get delayed and importers avoid sourcing from Pakistan.
Non-transparent procedure for registration of drugs provides undue
protection to domestic pharmaceutical firms in many countries and the
foreign pharmaceutical companies and drug suppliers are denied market
access.
The registration procedures as laid down by the Agreement on Trade-related
intellectual property rights needs to be made transparent.
Quarantine certification; food labeling and packaging regulations
[description of food ingredients; indication of nutritional claimssubstantiated and specified], high rate of inspection etc raises the cost of
export and delays the shipment of consignments for the countries not
having preferred status through bilateral MOU;
The food sanitation law requirements are also too stringent and need to be
brought at par with internationally accepted standards.
This trade restrictive requirements needs to be eliminated for products like
Art silk fabrics and art silk garments. The Azo Dyes certification test results
differ from laboratory to laboratory and this leads to denial of market access
and also increases costs to exporters.
Categorising NTBs
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In its compilation of proposals submitted by Members on NTBs,
the Secretariat identified four categories of NTBs –
Category 1 are those that are covered by an existing WTO
Agreements and do not have a specific separate negotiating
mandate.
Category 2 are those that are covered by a specific WTO
Agreement and are also subject of a specific separate
negotiating mandate.
Category 3 are defined as barriers that are not specifically
covered in an existing WTO Agreement, but that are related to
aspects of the Doha Work Programme.
NTBs in Category 4 are classified as barriers that are not
covered in a specific WTO Agreement, and are not the subject
of a separate negotiating mandate.
Categorising NTBs
Category 1: SPS, TBT, RoO, Import Licensing
etc.
Category 2: Anti-dumping and Subsidies &
Countervailing Measures (SCMs)
Category 3: Trade Facilitation measures
Category 4: Outside the existing WTO
agreements and Doha Agenda
Composition of Mfg. Exports from
South Asia
Bangladesh:
RMG (Woven and Knitware), Jute products, Frozen foods and
Leather & leather products
India:
textiles and RMG, gems and jewelry, engineering goods,
transport equipments, machinery, chemical products, leather
products, handicrafts etc.
Nepal:
RMG, Woollen carpets, Pashmina products, Handicrafts, Silver
jewelleries
Pakistan:
Textiles & garments, Leather & leather products, sports goods,
Carpets, surgical instruments
Sri Lanka:
Processed food, textiles & apparel, gems etc.