Non-tariff measures prevent Jamaican SMEs from success

Newly established small- and medium-sized enterprises in Jamaica are more affected by non-tariff measures (NTMs) than larger firms, according to a study carried out by the International Trade Centre (ITC) which found that a lack of information and adequate resources, among others, make it harder for SMEs to overcome obstacles to trade.

The study found that, of the more than 600 businesses surveyed, approximately 35% faced burdensome NTMs. Forty-one per cent of exporting companies identified NTMs as a major deterrent to the success of their businesses, while the high incidence of burdensome NTMs experienced by the manufacturing, processed food and agro-based industries was highlighted as a cause for concern.

Kingston workshop

The findings of the study and how to address NTMs and other barriers to trade were discussed at a workshop in Jamaica’s capital Kingston on 6 March. The workshop was organized by ITC in collaboration with Jamaica’s Ministry of Foreign Affairs and Foreign Trade, and brought together more than 100 participants from both public and private sectors agencies, including exporters and importers.

NTMs, which include quotas, special licences, export restrictions, technical barriers to trade, sanitary and phytosanitary measures, and rules of origin, have become the principal impediment to international trade and can prove to be a major obstacle to local, regional and global trade in both goods and services as companies struggle to comply with an increasingly complex web of policies and at times opaque technical standards.

ITC Executive Director Patricia Francis said: ‘A country needs to take a holistic look at all policies and measures that have an impact on business’s ability to invest and enhance competitiveness. This approach is made possible by obtaining greater transparency on NTMs which in turn allows for related domestic reform of institutions and policies.’

Food-safety certification

Experts at the workshop discussed the need for Jamaica’s Government to set up a service for both exporters and importers to register complaints on NTMs experienced in domestic agencies, enabling agencies to address the most common problems. It was proposed that the government and exporters should take necessary steps to obtain Hazard Analysis and Critical Control Point (HACCP) certification, to comply with new regulations of the US Food Safety Modernization Act, and that they should work together to try to reduce the cost of the process.

Senator A.J. Nicholson, Jamaica’s Minister of Foreign Affairs and Foreign Trade, said: ‘Of particular concern, recently, has been the issue of private standards. These standards and procedures, exceeding international requirements, are developed internally by multinational companies, such as supermarkets, and enforced throughout their supply chains. Such policies impact on the ability of Jamaican suppliers to make inroads into the global value chain, as they place undue burdens on exporters in supplying both final and intermediate products to private and commercial consumers internationally.’

ITC is working with the private sector in 27 countries, including Jamaica, to identify barriers to trade and provide advice to governments on how to overcome and reduce them. Understanding enterprises’ key concerns with NTMs can assist governments to better define national strategies and policies and take steps to alleviate the problems, for example by building national capacity in complying with technical regulations.