Chapter A: Sanitary and phytosanitary measures (SPS)
Sanitary and phytosanitary (SPS) measures are technical in nature and can include prohibition, measures governing quality and hygenic requirements, production process, and related conformity assessments. SPS measures are generally applied to:
- Protect human or animal life from risks arising from additives, contaminants, toxins or disease-causing organisms in their food;
- Protect human life from plant- or animal-carried diseases;
- Protect animal or plant life from pests, diseases, or disease-causing organisms;
- Prevent or limit other damage to a country from the entry, establishment or spread of pests; and to protect bio-diversity. These include measures taken to protect the health of fish and wild fauna, as well as of forests and wild flora.
- Measures used for these objectives include import prohibition, authorization, tolerance limits and hygienic requirements, labelling and marking requirements, and conformity assessments such as testing, certification and quarantine requirements.
Examples:
- Prohibition on import of poultry from countries affected by avian flu.
- Liquid eggs should be pasteurized or otherwise treated to destroy all viable Salmonella microorganisms;
- Live animals required to be quarantined for two weeks before entry into the territory
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Chapter B: Technical barriers to trade (TBT)
TBT measures refer to technical regulations, and procedures for assessment of conformity with technical regulations and standards, excluding measures covered by the SPS Agreement. TBT regulations lay down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method.
This chapter also covers conformity assessment, i.e. any procedure used, directly or indirectly, to determine that relevant requirements in technical regulations or standards are fulfilled. It may include, inter alia:
- Procedures for sampling, testing and inspection;
- Evaluation, verification and assurance of conformity;
- Registration, accreditation and approval;
- Combinations of the above
Examples:
- Importers of "sensitive product" such as medicines, drugs, explosives, firearms, alcohol, cigarettes, game machines, etc. may be required to be registered in the importing country;
- Refrigerators need to carry a label indicating its size, weight as well as electricity consumption level.
- For a product to be identified as “chocolate”, it must contain a minimum of 30% cocoa.
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Chapter C: Pre-shipment inspection and other formalities
This chapter includes measures that require mandatory quality, quantity and price control of goods prior to shipment from the exporting country. It my also include governments requirement for shipments to arrive directly from the country of origin (without stopping in a third country), or to pass through a designated entry point or to pass through specified port of customs.
Examples:
- A pre-shipment inspection of textile imports by a third party is required for verification of colours and types of materials
- DVD players need to be cleared at a designated customs office for inspection
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Chapter D: Contingent trade protective measures
These are measures implemented to counteract particular adverse effects of imports in the market of the importing country, including measures aimed at 'unfair' foreign-trade practices, contingent upon the fulfilment of certain procedural and substantive requirements. It includes anti-dumping, countervailing and safeguard measures.
Examples:
- Antidumping duty imposed on particular product from certain countries to correct unfair pricing practices.
- A countervailing duty of 44.71% imposed by Mexico on imports of 'dynamic random access memory (DRAM) semiconductors' from Country A to offset the subsidies granted by the exporting country on the production or trade of the product.
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Chapter E: Non-automatic licensing, quotas, prohibitions and quantity-control measures other than for SPS or TBT reasons
These measures are generally aimed at restraining the quantity of goods that can be imported, regardless of whether they come from different sources or one specific supplier. These measures can take the form of non-automatic licensing, fixing of a predetermined quota, or through prohibitions.
Examples:
- Imports of textile products are subject to a discretionary licence.
- Import of motor a vehicle with cylinder under 1500cc is not permitted to encourage domestic production.
- Annual import of fish restricted to 100 tons.
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Chapter F: Price control measures, including additional taxes and charges
Measures implemented to control or affect the prices of imported goods in order to, inter alia,: support the domestic price of certain products when the import prices of these goods are lower; establish the domestic price of certain products because of price fluctuation in domestic markets, or price instability in a foreign market; or to increase or preserve tax revenue. This category also includes measures, other than tariffs measures, that increase the cost of imports in a similar manner, i.e. by a fixed percentage or by a fixed amount: they are also known as 'para-tariff' measures.
Examples:
- A minimum import price is established for fabric and apparel.
- Excise tax, tax on alcoholic consumption, cigarette tax
- CO2 emission charge on motor vehicles.
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Chapter G: Financial measures
Financial measures are intended to regulate the access to and cost of foreign exchange for imports and define the terms of payment. They may increase import costs in the same manner as tariff measures. It includes measures such as advance payment requirements, and regulations governing foreign exchange rates.
Examples:
- Payment of 50% of the transaction value is required three months before the expected arrival of the goods to the port of entry.
- Imports of construction materials are allowed only if payments may be made through the foreign direct investment fund.
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Chapter H: Measures affecting competition
These measures are aimed at granting exclusive or special preferences or privileges to one or more limited group of economic operators. It may include government imposed special import channels or enterprises, and compulsory use of national services.
Examples:
- A statutory marketing board with exclusive rights to control imports of certain grains;
- A canalizing agency with exclusive right to distribute petroleum.
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Chapter I: Trade-related investment measures
These measures include requirement to use certain minimum levels of locally made components, restricting the level of imported components or measures limiting the purchase or use of imported products by an enterprise to an amount related to the volume or value of local products that it exports.
Examples:
- In the production of automobiles, locally-produced components must account for at least 50% of the value of the components used.
- A company may import materials and other products only up to 80% of its export earnings of the previous year.
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Chapter J: Distribution restriction
Distribution of goods inside the importing country may be restricted. This may be controlled through additional licence or certification requirements.
Examples:
- Imported beverages may only be sold in cities that have facility to recycle the containers.
- Exporters of motor vehicles need to set up their own retail points as existing car dealers in the destination country belong exclusively to car producers in that country.
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Chapter K: Restriction on post-sales services
Measures restricting producers of exported goods from providing post-sales services in the importing country.
Example:
- After-sales servicing on exported TV sets must be provided by local service company of the importing country.
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Chapter L: Subsidies
Financial contribution by a government or government body to a production structure, being a particular industry or company, such as direct or potential transfer of funds (such as grants, loans and equity infusions), payments to a funding mechanism and income or price support.
Example:
- The government provides producers of chemicals a one-time cash grant to replace antiquated production equipment.
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Chapter M: Government procurement restrictions
Measures controlling the purchase of goods by government agencies, generally by giving preference to national providers.
Example:
- Government office has a traditional supplier of its office equipment requirement, despite higher prices than similar foreign suppliers.
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Chapter N: Intellectual property
Measures related to intellectual property rights in trade: intellectual property legislation covers patents, trademarks, industrial designs, lay-out designs of integrated circuits, copyright, geographical indications and trade secrets.
Example:
- Clothing with unauthorized use of trademark is sold at much lower price than the authentic products
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Chapter O: Rules of origin
Rules of origin cover laws, regulations and administrative determinations of general application applied by governments of importing countries to determine the country of origin of goods. Rules of origin are important in implementing such trade policy instruments as anti-dumping and countervailing duties, origin marking, and safeguard measures.
Example:
- achinery products produced in a country is difficult to fulfil the rules of origin to qualify for the reduced tariff rate of the importing country, as the parts and materials originate in different countries.
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Chapter P: Export-related measures
Export-related measures are all measures applied by the government of the exporting country to exported goods, including both technical and non-technical measures.
Examples:
- Export of corn is prohibited because of shortage in domestic consumption
- An export monopoly board, to take advantage of terms of sale abroad; a marketing board, to promote for export on behalf of a large number of small farmers
- Exports of processed food products must be inspected for sanitary conditions.
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