2BackgroundUNCTAD work on NTMs goes back to early 1980s when a taxonomy of different possible types of NTMs was developed.Effort led to the establishment of the UNCTAD Coding System of Trade Control Measures (TCMCS) in late 1980s, following several revisionsCollecting data using TCMCS began in 1988Data in the Trade Analysis and information System (TRAINS) database in 1992After several revisions
3Outline Backgound UNCTAD’s new initiative on NTMs Overview of UNCTAD’s old NTM classificationNew NTM classification
4BackgroundSince the 1990’s UNCTAD has maintained a database on tariff and NTMsVery good success with tariff, good coverage with more than 167 countries and updated on a regular basisNot so good success with NTMs, very few countries with partial data and we never managed to update data on regular basis.Why?Much easier to collect data on tariff as countries publish tariff schedules and update these every fiscal year.NTMs are not listed in one publication as it is for tariff information and countries don’t publish themAfter several revisions
5BackgroundSome FactsPast 20 years, trade liberalization has been used as an effective development toolDuring this period, we have seen a continual decline of tariff rates by virtue of MTAs under WTO and PTAs at regional and bilateral levelReduction in tariffs has not been reflected by a reduction in Non-Tariff Measures (NTMs)Governments are using increasingly sophisticated methods about how they protect domestic industries. While trade barriers have historically taken more obvious forms, such as tariffs or quotas, trade barriers are now taking different forms which are harder to identify and quantify and can easily serve protectionist purposes
6BackgroundSome reasons why a focus on NTMs is needed todayNTMs are increasingly becoming important as countries are recurring to NTMs as alternative trade policy instruments for protectionist or regulatory purposesProliferation of NTMs: Trade is today regulated by an increasing number of NTMs both in terms of countries adopting these measures as well as in their variety.Governments are using increasingly sophisticated methods about how they protect domestic industries. While trade barriers have historically taken more obvious forms, such as tariffs or quotas, trade barriers are now taking different forms which are harder to identify and quantify and can easily serve protectionist purposes
7Background More Reasons NTMs can add to the cost of trading NTMs can be discriminatory, and thus can have important trade diverting effect. Even when NTMs are indiscriminately applied to all imported goods, many NTMs discriminate among a country's trading partners because costs of compliance are often different across exportersSometimes protectionist intents could be hidden behind NTMs due to their complexityAs NTMs are integral part of the trade negotiation agendas, both at the multilateral and at the bilateral level, policymakers should be aware of the use of NTMs and their effect on international trade, especially in terms of market access
8UNCTAD: New Initiative on NTMs Data Collection September 2005, UNCTAD organized an Expert Meeting on NTBs with the following main objectives:Identify ways to improve NTBs data in TRAINS databaseClarify methodologies for definition and classificationLook at experiences of other organizations in dealing with NTBsIdentify methodological approaches for quantification of NTMs and assess their impacts88
9Recommendations of NTBs Expert Meeting (2005) The main conclusion of the meeting was:a clearer understanding of NTBs definition and classification as well as the availability of reliable and detailed data were prerequisites for reliable quantification, improved analysis and negotiation of better market access.Accurate and up-to-date information on non-tariff barriers could help trade negotiators.99
10Group of Eminent Persons on NTBs Following the meeting, UNCTAD Secretary General established the Group of Eminent Persons on NTBs (GNTB).Main purpose of GNTB is to discuss definition, classification, collection and quantification of NTBs so as to identify data requirements, and consequently to facilitate the understanding of the implications of NTMs.1010
11Members of the Group of Eminent Persons on NTBs 11
12Multi-Agency Support Team (MAST) To carry out the technical work of the GNTB, a Multi-Agency Support Team (MAST) was also set up.Main objectives of MAST:Produce an updated classification of various NTBsAdvise on the feasibility of data collection of NTBsMembers: Food and Agriculture Organization (FAO) , International Monetary Fund (IMF), International Trade Centre (ITC), Organization for Economic Cooperation and Development (OECD), United Nations Conference on Trade and Development (UNCTAD), United Nations Industrial Development Organization (UNIDO), World Bank (WB) and World Trade Organization (WTO)Observers: European Commission, and US International Trade Commission and Department of AgricultureFor those new to this project, and to remind those who have been with the project from the beginning, let me give you the back ground.1212
13GNTB and MAST Technical Meetings UNCTAD Secretary General’s Group of Eminent Persons on NTBs (GNTB): 6 July 2006 and 5 November 2009, GenevaMulti-Agency Support Team for GNTB (MAST): Conducted 5 meetings from Oct. 06 to Jan. 09 (Washington DC, Rome, Vienna, Paris and Geneva)For those new to this project, and to remind those who have been with the project from the beginning, let me give you the back ground.1313
14Recommendations of GNTB First GNTB meeting of July 2006:NTM Definition should be as broad as possibleCollection from both importer (government) and exporters (complaints by traders)
15UNCTAD: Definition of NTMs (1) UNCTAD (GNTB-MAST):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.NTMs are measures that have the potential to substantially distort international trade, whether their trade effects are protectionist or not15
16UNCTAD: Definition of NTMs (2) The protectionist or discriminatory intent is the factor differentiating non-tariff barriers (NTBs) from NTMsMAST agrees that NTBs are a subset of NTMs recognizing that the a priori distinction of NTBs from NTMs should be avoided.16
17GNTB of 2009 Adoption of revised definition and classification Green light for global data collection effort and start using the new classification
18MAST new NTM Classification Drawing upon the existing, outdated classification of NTMs [UNCTAD Coding System of Trade Control Measures (TCMCS) in late 1980s], modifications and new measures to reflect the current situation of NTMs in international trade were introduced.Proposed new classification includes a substantial number of new sub-categories on SPS and TBT.Introduction of new measures (Government Procurement, Export measures, Intellectual Property rights, etc).Classification suited to collect detailed information.More than 250 measures at the most detailed level1818
19MAST new NTM Classification The new classification was officially launched in 2009.It was then revised in 2012 to include modifications suggested by WTO.1919
20Procedural Obstacles Classification The new classification introduces the concept of “procedural obstacles”Procedural obstacles refer to issues related to the process of application of an NTM, rather than the measure itself“Testing requirement” a TBT measure as opposed to “Excessive documentation requirement”, a procedural obstacleThese can only be collected through firm-level surveys
21Procedural Obstacles Administrative burdens related to regulations Information/transparency issuesDiscriminating behavior of officialsTime constraintsInformal or unusually high paymentLack of sector-specific facilitiesLack of recognition/ accreditations
23^ Transparency in Trade UNCTAD’sGlobal Initiative^ Transparency in TradeUNCTAD GNTB-MAST would like the New NTMs Classification to be the standard classification for the collection, analysis and dissemination of NTMs information by all international, as well as regional organizations and national agencies.UNCTAD in collaboration with the World Bank, AfDB, and WTO and ITC propose to launch a multi-year programme to build, update and disseminate free of charge a NTMs database using the new NTMs classification and covering as many countries as possible.New Funding requests for all market access data related work including NTMs (as well as trade and tariff)2323
24ObjectivesWhy Transparency?Improved transparency on NTMs would contribute to discouraging their use as hidden protectionist instruments.Better information on NTMs would contribute better target trade-facilitation and aid-for-trade programs.This would contribute to a coordinated effort on NTMs data collection, capacity building and dissemination, which would help policy makers and researchers to better understand the implications of NTMs for international trade and to identify the best policy option to help developing countries to take advantage of the global market.Need to contain myriad regulations from their potential drift toward hidden protectionism. NTMs can be legitimate policy instruments, e.g. standards aimed at protecting consumers. However, they can also be abused as protective and discriminatory instruments, in which case they become non-tariff barriers (NTBs).-Global monitoring of NTMs is needed from a trade-facilitation perspective. Irrespective of possible protectionist intent, NTMs are of particular concern to developing and least developed countries, whose suppliers typically struggle to comply with complex requirements. Lacking infrastructure and export-support services, they are at a disadvantage relative to producers in more developed countries. They also often lack access to relevant information about foreign regulations and standards. These impediments can limit market access for the poorest countries, shutting them out from the opportunities created by globalization.-There is little knowledge about their use, their impact on international trade, and their implications for developing countries’ market access. Part of the reason lies in the difficulties in collecting and systematically categorizing NTMs data. Unlike tariffs, NTMs are not mere numbers; they are complex legal texts that are not easily amenable to quantification, comparison, or even standard formatting.-As traditional trade-policy options are limited by WTO, regional and bilateral commitments, governments may turn to more subtle measures to restrict imports, especially during economic crises, when protectionist pressures mount. Improved transparency on NTMs would contribute to discourage their use as hidden protectionist instruments.2424
25ObjectivesCapacity BuildingProgram will set up a network of international, regional and national agencies, which will collaborate in the collection and dissemination of NTM data.To increase transparency and monitoring of NTMs applied at the country and product level.To foster ownership for the creation of a sustainable data collection framework at the regional and national levels.To encourage economic analysis of NTMs and their impact on international trade.-This is to be achieved by developing, populating and disseminating free of charge, a database on NTMs for policy makers, researchers, trade support institutions, exporters, importers, and others involved in international trade with streamlined and transparent NTM data at country- and product-level.This will be achieved by technical training, collaboration, and capacity building in regional agencies and local institutions in the collection and analysis of official NTM data.The availability of a freely accessible database on NTMs will to increase analytical capacities in developing countries, and will create a powerful incentive for quantitative research on the impact of NTMs on international trade.2525
26Transparency in Trade (TNT) initiative Joint fund raising initiative of the World Bank with UNCTAD, UNSD, ITC and WTOfor Global trade data requirement including:Trade statisticsTariff dataNon-Tariff MeasuresServices data
27Current status of TNTConcrete fund commitment from African Development Bank (AfDB):For countries in Africa as well as their major export markets (such as EU, USA, Japan and China)Other donors are being sought by the World BankSmall trust funds of WB and UNCATD are used to finance specific projects within TNT
28Strategy for NTB official data collection Through regional organization such as ASEAN and ALADIThrough academic institutions: China, some African and Asian countries with the World BankNational Consultants: USA, CanadaDirectly by UNCTAD: EU, Japan
29Future Quantification of NTMs Identification of NTBs and move towards their reduction/eliminationHarmonization of NTMsCapacity Building
30OLD NTMs Classification UNCTAD Coding System of Trade Control Measures1994Six Chapters: 3-8 (1 and 2 are for tariffs and para-tariffs)3. Price Control Measures4. Finance Measures5. Automatic Licensing6. Quantity Control Measures7. Monopolistic Measures8. Technical Measures
31Old Classification overview The old classification identifies over 100 different types of NTMs at its most detailed level grouped in six broad categories.NTMs divided into Core and non-Core measuresCore Measures: Measures intended to protect local producers.Non-Core Measures: Measures intended to protect local consumers.
39OLD CLASSIFICATION NEW CLASSIFICATION 3. PRICE-CONTROL MEASURES4. FINANCE MEASURES 5. AUTOMATIC LICENSING 6. QUANTITY CONTROL MEASURES7. MONOPOLISTIC MEASURES8. TECHNICAL MEASURESNEWNEW CLASSIFICATIONF. PRICE-CONTROL MEASURES, INCLUDING ADDITIONAL TAXES AND CHARGESD. CONTINGENT TRADE-PROTECTIVE MEASURESG. FINANCE MEASURES E. NON-AUTOMATIC LICENSING, QUOTAS,PROHIBITIONS AND QUANTITY-CONTROLMEASURES OTHER THAN FOR SPS OR TBTREASONH. MEASURES AFFECTING COMPETITIONA. SANITARY AND PHYTOSANITARY MEASURESB. TECHNICAL BARRIERS TO TRADEC. PRE-SHIPMENT INSPECTION AND OTHERFORMALITIES I. TRADE-RELATED INVESTMENT MEASURESP. EXPORT-RELATED MEASURES
40Comparing old and new classification OLD NTM classificationNew NTM Classification8110. Product characteristics requirementsB6. Product identity requirementB7. Product quality or performance requirement8120. Marking requirementsB32. Marking requirements for TBT reasonsorA32. Marking requirements for SPS reasons8130. Labelling requirementsB32. Labelling requirements for TBT reasonsA32. Labelling requirements for SPS reasons8140. Packaging requirementsB33. Packaging requirements for TBT reasonsA33. Packaging requirements for SPS reasons
41Comparing old and new classification OLD NTM classificationNew NTM Classification8150. Testing, inspection and quarantine requirementsA8 or B8Conformity Assessment8160. Information requirementsNo match8170. Requirement relative to transitC2. Direct consignment requirement8200. Pre-shipment inspectionC1. Pre-shipment inspection8300.Special customs formalities8400. Obligation to return used product41
42NTMs Classification Structure of the NTMs classification Two Broad Categories: Imports and Export MeasuresImports Measures further subdivided into Technical and Non-Technical MeasuresWithin Technical Measures->3 chapters A-CWithin Non-Techical Measures->12 chapters D-OOnly one chapter for Export Measures
43P. Export-related measures (including export subsidies) NTMs ClassificationTechnicalMeasuresA. Sanitary and Phytosanitary Measures (SPS)B. Technical Barriers to Trade (TBT)C. Pre-shipment inspection and other formalitiesImport measuresD. Contigent trade protective measuresE. Non-automatic licensing, quotas, prohib. and QCMF. Price control measures including add. taxes and ch.Non-TechnicalMeasuresG. Finance measuresH. Measures affecting competitionI. Trade-related investment measuresJ. Distribution restrictionsK. Restrictions on post-sales servicesL. Subsidies (excluding export subsidies)M. Government procurement restrictionsN. Intellectual propertyO. Rules of OriginExportMeasuresP. Export-related measures (including export subsidies)
44NTM classification Tree Structure The classification develops a tree/branch structure where measures are categorized into chapters, depending on their scope and/or designEach chapter is further differentiated into several subgroups to allow a finer classification of the regulations affecting trade, using a tree/branch structure up to 3 levels (1,2 and 3 digits)
46Chapter AChapter A deals with sanitary and phytosanitary measures, which are generally referred to as SPS. It gathers measures such as restriction for substances and ensuring food safety, and those for preventing dissemination of disease or pests. Chapter A also includes all conformity-assessment measures related to food safety, such as certification, testing and inspection, and quarantine.
47Chapter BChapter B collects technical measures, also called TBT. It refers to measures such as labelling, standards on technical specifications and quality requirements, and other measures protecting the environment. As in the case for SPS, chapter B also includes all conformity-assessment measures related to technical requirements, such as certification, testing and inspection. The last chapter in the
48Chapter CThe last chapter in the technical measures section is chapter C, which classifies the measures related to pre-shipment inspections and other customs formalities.
49Chapter DChapter D groups the contingent measures, i.e. those measures implemented to counteract particular adverse effects of imports in the market of the importing country, including measures aimed at unfair foreign trade practices. They include antidumping, countervailing, and safeguard measures.
50Chapters E & FChapter E includes licensing, quotas and other quantity control measures, including Tariff rate quotas. Chapter F lists price-control measures implemented to control or affect the prices of imported goods. Among the examples are those to support the domestic price of certain products when the import prices of these goods are lower; to 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 (para-tariff measures).
51Chapters GChapter G lists the finance measures. It refers to measures restricting the payments of imports, for example when the access and cost of foreign exchange is regulated. It also includes measures imposing restrictions on the terms of payment.
52Chapter HChapter H includes those measures affecting competition – those that grant exclusive or special preferences or privileges to one or more limited group of economic operators. They refer mainly to monopolistic measures, such as State trading, sole importing agencies or compulsory national insurance or transport.
53Chapters IChapter I deals with trade-related investment measures, and groups the measures that restrict investment by requiring local content or requesting that investment be related to export in order to balance imports.
54Chapters J & K Chapters J & K Chapters J and K relate to the way products, or services connected to the products, are marketed after imports. They are considered non-tariff measures because they could affect the decision of being imported. Chapter J, on distribution restrictions, refers to restrictive measures related to the internal distribution of imported products. Chapter K deals with restrictions on post-sales services, for example, restrictions on the provision of accessory services.
55Chapters L, M, N and OThese chapters relate to behind-the-border policies. Chapter L contains measures that relate to the subsidies that affect trade. Chapter M, on government procurement restriction measures, refers to the restrictions bidders may find when trying to sell their products to a foreign government. Chapter N gathers restrictions related to intellectual property measures and intellectual property rights. Chapter O, on rules of origin, groups the measures that restrict the origin of products or its inputs.
56Chapters PThe last chapter, chapter P, is on export measures. It groups the measures a country applies to its exports. It includes export taxes, export quotas and export prohibitions.
57Using the classification to collect NTMs The classification greatly simplifies data collection.Challenge is how classify laws and regulations into the appropriate NTM category.There is not a single national repository of NTM information as laws and regulations affecting trade are enacted by different government agencies.
58GUIDELINES TO COLLECT NTMs GENERAL CONSIDERATIONSWhat do we want to achieve and what kind of information is recorded?Build a database containing all official NTMs affecting products to be imported or exported. Database will have the following structure:
59Official NTMs Database Structure Necessary InformationReporting country ('who applies the measure')HS Product codeProduct description (National Tariff line or HS6 digits)Measure code from the NTM classificationMeasure description the NTM classificationStart Year (and Start Month) of the measure (Date of entry into force)Product Coverage indication (Full or Partial)Countries affected by the measure (products originating from specific countries)Source of the measure (link if available online), language, # legislationObjective of the measure (reasons behind the existence of the measure)Other notes, if necessary59
60Example of NTM dataset See Access table Data extracted from TRAINS database via WITS software at
61GUIDELINES TO COLLECT NTMs GENERAL CONSIDERATIONSMeasure (NTM) versus RegulationA measure is a trade control requirement enacted within a legal text or regulation issued officially by a country. One regulation could bear several NTMs. A regulation is a legal document issued officially by a government, such as a law, decree, directive, order, etc..
62GUIDELINES TO COLLECT NTMS Steps to collect NTMsIdentify sources of InformationIdentify Documents from each SourceIdentify Regulations from each documentIdentify and classify measures within each regulationIdentify affected products
63GUIDELINES TO COLLECT NTMS Identifying Sources of InformationOne or several sources depending on the countrySource is the institutionIn ALADI countries, information is published in the official journal by the office of the PresidentThe US publishes the information on line.The EU also on line (Export Help Desk)
64Example of Government agencies dealing with trade regulations Sanitary and PhytosanitaryMeasures (SPS)Ministry of agriculture; Standardization AgencyBTechnical Barriers to Trade(TBT)Standardization Agency; Ministry of Healthcare;Ministry of Ecology; Ministry of IndustryCPre-shipment Inspectionand other formalitiesCustoms AgencyDContingent Trade Protective MeasuresMinistry of Finance; Ministry of Economy or TradeENon-Automatic Licensing, Quotas, Prohibitions and Other Quantity Control MeasuresMinistry of Economy (or Trade, Foreign Relations)FPrice Control Measures Including Additional Taxes and ChargesMinistry of Economy (or Trade, Foreign Relations); Customs AgencyGFinance measuresMinistry of Finance; National BankHMeasures Affecting CompetitionITrade-related investmentmeasuresPExport-related measures
65GUIDELINES TO COLLECT NTMs Identifying documents from each sourceAn inventory of documents on trade regulations is needed from each source.Trade regulations are published in documents and/or websitesTrade regulations may be published in one or several documentsExample Bangladesh:Import Policy Order,Bangladesh Bank Foreign Exchange Department Circular
66GUIDELINES TO COLLECT NTMs Examples of document titlesBangladesh:Import Policy Order,Bangladesh Bank Foreign Exchange Department CircularSri Lanka:Food ActConsumer Affairs Authority ActImport and Export (Control) ActAnimal Deseases ActPlant Protection ActThe Fauna and Flora Protection Ordinance
67GUIDELINES TO COLLECT NTMs Examples of document titlesNepal:Nepal StandardsPlant Protection ActForeign Exchange Regulation CircularCustoms TariffValue Added Tax Act 1996PakistanImport Policy Order 2009Export Policy OrderPakistan Animal Quarantine (Import and Export of Animal and Animal Products) ordinance, 1979
68GUIDELINES TO COLLECT NTMs Identifying Regulations from each DocumentA document may contain one or several regulations.All regulations within each document need to be identified and recordedA regulation may be called a law, an act, an ordinance, a directive, an order, a notification or a decree
69GUIDELINES TO COLLECT NTMS Identifying and classify Measures within each RegulationOnce all regulations have been identified, all measures within each Regulation have to be classified according to the NTMs classification.A regulation has to be clearly read to be able to find the corresponding NTM code
70GUIDELINES TO COLLECT NTMS Identifying products affected by the measureThe National HS classification will be provided by UNCTAD.If the National HS classification is not available, the HS 6-digit will be used.
71GUIDELINES TO COLLECT NTMS Identifying affected countriesList the countries affected by the measure (usually all countries)
72GUIDELINES TO COLLECT NTMS Work flow for each regulationRegulation 1Measure 1Countries AffectedProducts AffectedObjectives mentionedMeasure 2Measure 3
73GUIDELINES TO COLLECT NTMs Principles for classifying measuresRegulation, Measure name and Measure code ->A regulation may contain one or several measures. Each measure to be classified into no more than one NTM code.Selecting a code within a branch -> A measure should be classified using the most detailed code (4 digits)
74GUIDELINES TO COLLECT NTMs Principles for classifying measuresDifferent regulations imposing the same measure ->If 2 distinct regulations impose measures that would be classified into the same code, the measure is to be registered twice, each with its corresponding official source.Leading and supporting measures -> Only the leading measure needs to be recorded
75GUIDELINES TO COLLECT NTMs Principles for classifying measuresLikelihood but not certainty of controls ->when the legislation states that inspection or conformity assessment could or may be applied or hypothetical situations (authorities might suspend imports if..). Such measures are not registered in the database. However, a random check should be recorded.Misleading words -> For example marking may be used in a regulation text to mean a proof of compliance rather than a Marking requirement . See EU with its EC marking. Two other terms, ‘certification’ and ‘prohibition’ can sometimes be misleading->see example in the guidelines
76EC marking A PLUS-POINT FOR SAFETY AND RELIABILITY According to EC Directive 89/106/CE only products which meet specific essential requirements of safety and reliability may enter and circulate in the European Economic Area; these requisites are mechanical strength and stability, fire, hygiene, health and environmental safety, safe use, protection against noise, energy saving and heat retention.EC marking is the pass for products which meet these specific requirements and which are guaranteed by their full compliance with European Technical Specifications.
78GUIDELINES TO COLLECT NTMs Principles for classifying measuresWhen to use conformity assessment measures? ->The conformity assessment (A8 or B8) is a verification process that normally goes with a requirement and is intended to prove its compliance by a certification. In this case we have two types of measures that have to be recorded in the database.Pay attention to the difference between:1. Tolerance limit (A21 or B21) and Restricted use (A22 or B22)2. Labeling (A31 or B31) and Marking (A33 or B33)3. Testing (A82 or B82) and Inspection (A84 or B84)4. Identity requirement (B6) and Quality or performance requirement (B7)
79GUIDELINES TO COLLECT NTMs Principles for classifying measuresIs Labeling for food SPS or TBT? ->Labeling requirements for foods products can be applied to both categories A31 and B31
80GUIDELINES TO COLLECT NTMs Principles for classifying measuresSome notes on specific NTM codes1) Product Quality or performance requirement (B7) should only be used when the measure imposes specific quality or performance requirements such as durability or energy consumption. There is a need to read the regulation text thoroughly as not to miss its mean objective (see example in the guidelines).2) System approach. The code (A13) should be used only when either “Systems approach” or “HACCP” words are found in the text of the regulation.
81GUIDELINES TO COLLECT NTMs Principles for classifying measuresCan’t find the code for a measureAt the end of each chapter there is always a code for n.e.s (no where else). Those are codes ending in 9. In case of doubt send an to