Businesses face a web of non-tariff measures (NTMs) when shipping their products across borders. ITC’s NTMs programme brings transparency into the opaque tangle of rules, which are of particular concern to exporters and importers in developing countries. And with international tariffs at historic lows, the relative importance of NTMs as impediments to international trade is significantly increased
Background
NTMs vary across countries and products, and often change quickly and without little notice. This can cause significant impediments to exporters seeking access to foreign markets and their importer counterparts. These businesses need to comply with a wide range of requirements, including technical regulations, product standards and customs procedures. The business sector in developing countries often lacks the information, capabilities, and facilities to meet the complex requirements and demonstrate compliance with NTMs at reasonable costs. National policy makers often lack a clear picture of what their business sector currently perceives as predominant obstacles to trade, and this makes it difficult to develop appropriate trade-related policies.
Project goals
ITC aims to increase transparency and understanding of NTMs – in order to facilitate trade in the long-run. We help countries to understand the non-tariff obstacles to trade that their business sector faces, and we assist in defining strategies and solutions that meet their exporters’ needs to speed up and ease cross-border trade. ITC collaborates closely with ministries, export promotion agencies, research institutes, business associations and local experts in each country. ITC contributed to the development of a classification system for some 240 NTMs, led by the United Nations Conference on Trade and Development (UNCTAD).
The business perspective on NTMs is crucial to identifying and defining national strategies and policies that help overcome obstacles to trade. Exporters and importers have to deal with NTMs on a day-to-day basis, and they know best about the specific challenges and problems they face. Governments can better define needs for concrete action and capacity building when they understand businesses’ key concerns regarding NTMs. For example, governments will be able to better address measures around technical regulations and sanitary and phytosanitary regulations, conformity assessment and related technical assistance.
Understanding the obstacles: NTM country surveys
ITC and its national partners are conducting large-scale company surveys on NTMs and other obstacles to trade: issues that a country’s exporting and importing companies experience day-to-day. From 2010 to 2012, ITC will conduct surveys in 30 developing countries. In each country, 200-600 businesses will be interviewed about the most important NTM obstacles that they face in their daily operations. Countries participating in the survey in 2010 include Burkina Faso, Morocco, Paraguay, Peru, Sri Lanka, Kenya, Malawi, Rwanda and Uruguay. In 2011, we will conduct the survey in Burundi, Egypt, Madagascar, Mauritius and Tanzania. Trade ministries in other developing countries interested in participating in the survey in 2011 or 2012 should contact us at ntm@intracen.org.
The national enterprise surveys identify at product, sector and partner country-level the predominant obstacles the business sector faces when complying with NTMs. These include not only NTMs imposed by other countries, but also potential bottlenecks in the exporting country’s capabilities and technical facilities to meet regulations and demonstrate compliance with NTMs. The findings, gained through in-depth, face-to-face interviews, contribute to a better understanding of the specific needs of the business community. This enables targeted capacity building and better design of national strategies and policies. In particular, the surveys will identify:
- A pattern of the most challenging NTMs by sector, product, company size and partner country.
- The existing national procedures and facilities which need to be strengthened in order to better support the business sector in cross-border trade.
The survey includes a representative sample of exporters in all relevant sectors in each country. It also includes importers and intermediaries, such as forwarding agents. ITC and UNCTAD tested the survey methodology in a pilot project in six countries in 2008-2009.
The results of this pilot project indicated that major concerns for exporters include sanitary and phytosanitary measures and technical barriers to trade. The survey found that 72% of all companies questioned in six developing countries reported concerns about technical measures. Many of these concerns related to mandatory quality standards about product characteristics or associated production processes. The most burdensome requirements for exporters were:
- Compliance with certification requirements (20%)
- Labeling, marking and packaging requirements (12%)
- Traceability requirements (9%)
- Tolerance limits for residues and contaminants or restricted use of certain substances (8%)
For more details on the results, see our related article.
Upon completion of each national survey, ITC, in close collaboration with national partners, will provide an in-depth analysis of the survey results. This will help identify the need for concrete national action in the key export sectors and key NTM issues. Survey results are also discussed in a workshop, which initiates an ongoing dialogue among the business community, trade support institutions, government agencies, and academics.
The programme is financed by the United Kingdom’s Department for International Development (DFID).
Upon request, ITC also offers capacity building programmes in the area of NTMs, in particular with regards to technical regulations. If you are interested in finding out more or would like to receive more information on the survey methodology, contact us at NTM@intracen.org.