Non tarrif trade barriers

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TBT Agreement ---
 International treaty administered by the World Trade
Organization.
 It was last renegotiated during the Uruguay Round of
the General Agreement on Tariffs and Trade, with its
present form entering into force with the establishment of
the WTO at the beginning of 1995.
 In a nutshell, the TBT exists to ensure, technical
regulations, standards, testing, and certification procedures
which do not create unnecessary obstacles to trade.

 It is Closely linked to the Agreement on the Application of
Sanitary and Phytosanitary Measures,.
 The TBT promotes the development of international standards
and provides governments and inter-governmental bodies
with guidance on how to best develop such standards.
 TBT members are strongly encouraged to adopt international
standards as their technical requirements whenever possible.

 They are the obsacles to imports other than
tarrifs.
 They are the administrative measures that are
imposed by a domestic government to
discriminate against foreign goods and in favour
of home goods.
 Some of non-tariff barriers are not directly
related to foreign economic regulations but
nevertheless have a significant impact on
foreign-economic activity and foreign trade
between countries.


 Import bans.
 General or product-specific quotas.
 Rules of Origin.
 Sanitary and phytosanitary conditions.
 Packaging conditions.
 Labeling conditions.
 Product standards.
 Complex regulatory environment.
 Trade documents like Certificate of
Origin, Certificate of Authenticity etc.
 Occupational safety and health regulation.

 Import licenses.
 State subsidies, procurement, trading, state
ownership.
 Export subsidies.
 Fixation of a minimum import price
 Product classification.
 Quota shares.
 Intellectual property laws (patents, copyrights)
 Restrictive licenses
 Seasonal import regimes

 A quota is a limitation in value or
in physical terms, imposed on
import and export of certain goods
for a certain period of time.
 Putting a quota on a good creates
shortage of imported good and
price increases.
 Quota is a limit to slow down
the trade.

 In 2013, South Africa applied the TRQ on
imports of “Frozen cuts and edible offal of
fowls of the species Gallus domesticus”, a
type of chicken originating from the United
States of America:
 In 2005, TRQs apply to U.S. imports of certain
dairy products, beef, cotton, green olives,
peanuts, peanut butter, sugar, certain sugar-
containing products, and tobacco.
 A TRQ was applied to US steel imports in
2002

 It is a government policy to encourage export of goods
and discourage sale of goods on the domestic market
through direct payments, low-cost loans, tax relief for
exporters, or government-financed international
advertising.
 An export subsidy reduces the price paid by foreign
importers, which means domestic consumers pay more
than foreign consumers.
 At the WTO's Tenth Ministerial Conference was held
in Nairobi, Kenya from 15 to 19 December 2015, the WTO
member states agreed to eliminate export subsidies for
agricultural products; least-developed nations have until
the end of 2018 to eliminate agricultural export subsidies
(until 1 January 2017 in relation to cotton exports), while
developed nations agreed to eliminate most such
subsidies immediately.

 Standards take a special place among non-tariff
barriers.
 standards provide useful information on the
quality of the product, which is immensely
important for food products, as sub-standard
quality could prove harmful to human/animal
health.
 Countries usually impose standards on
classification, labeling and testing of products in
order to be able to sell domestic products, but
also to block sales of products of foreign
manufacture.
 These standards are sometimes entered under
the pretext of protecting the safety and health of
local populations.

 "voluntary" export restraints is an agreement
imposed on the exporter under the threat of
sanctions to limit the export of certain goods
in the importing country.
 This is entered by the importing country
when it is suffering from large imports.
 In case of reduction of export prices below
the minimum price level, the importing
country imposes anti-dumping duty which
could lead to withdrawal from the market.
 “Voluntary" export agreements affect trade in
textiles, footwear, dairy products, consumer
electronics, cars, machine tools, etc.

 Foreign Exchange Restrictions -
 Exchange control measures are used widely by a
number of developing countries to regulate imports.
Under this system an importer has to ensure that
adequate foreign exchange is available for imports by
getting a clearance from the exchange control
authorities of the country.
 Technical Regulations -
 Another measure to regulate the imports is to impose
certain standards of technical production, technical
specification, etc. The imported commodity has to
meet these specifications. Stringent technical
regulations and standards beyond international
norms, expensive testing and certification, and
complicated marking and packaging requirments.

 Quantity Restrictions, Quotas and Licensing
Procedures :-
 Under quantity restriction, the maximum quantity
of different commodities which would be allowed
to be imported over a period of time from
various countries is fixed in advance.
 The quota fixed normally depends on the
relations of the two countries and the needs of
the importing country.
 Here, the Govt. is in a position to restrict the
imports to a desired level. Quotas are very often
combined with licensing system to regulate the
flow of imports over the quota period as also to
allocate them between various importers and
supplying countries.

 India (by UK),nuclear exports restriction.
 Pakistan (by UK), nuclear exports restriction,
enacted 2002.
 Georgia (by Russia), agricultural products, wine,
mineral water, enacted 2006, lifted 2013.
 Iran (by US and US international allies), notably bar
nuclear, missile and many military exports to Iran
and target investments in: oil, gas and
petrochemicals, exports of refined petroleum
products, banks, insurance, financial institutions,
and shipping.Enacted 1979, increased through the
following years and reached its tightest point in
2010. prabha.reddy95@gmail.com

Japan, animal shipments due to lack of infrastructure
and radiation issue after the 2011 Tohoku earthquake .
Indonesia (by Australia), live cattle because of cruel
slaughter methods in Indonesia.
Syria (by EU, US), arms and imports of oil.
EU, US, Australia, Canada and Norway (by Russia)
since August 2014, beef, pork, fruit and vegetable
produce, poultry, fish, cheese, milk and dairy.[On
August 13, 2015, the embargo was expanded
to Albania.

 The SPS Agreement of the World Trade Organization
(WTO) establishes rules by which an importing country can establish
sanitary and phytosanitary regulations to prohibit or restrict
imports.
 In general, the WTO requires the regulations of member-countries to
be nondiscriminatory, science-based, and least-trade restrictive and
maintains a legal mechanism to resolve disputes among member-
countries.
 For example, the WTO encourages importing countries to only limit
trade restrictions to those geographic areas of an exporting country
where a pest is present if the exporting country has controlled the
pest in that area.
 In the United States, APHIS maintains the regulatory authority for
safeguarding crops and the environment by eradicating or
controlling the spread of invasive pests and--through the inspection
and the regulation of imports--preventing their introduction.

 In the floriculture sector, there are certain plant
quarantine procedures in some importing countries
including zero tolerance for some insects and pests,
which affect our market access.
 The export of Indian milk product is affected on
account of certain conditions like proof of absence of
Scrapie in India insisted upon by some trading
partners.
 There is continuing ban on import of Indian meat by
some countries even though India has been free from
rinder pest for the last three years.
 There are different regulations on use of pesticides
and pesticides residues by various importing
countries, which has affected market access of Indian
products like grapes, egg products, gherkins, honey,
meat products, milk products, tea and spices.

In the agricultural product sector, there are barriers to
export of mangoes and other fruit on account of
insistence of some of our major trading partners to
use only the Vapour Heat Treatment (VHT) procedure.

With the exception of export subsidies and
quotas, NTBs are most similar to the tariffs.
Thus, NTBs can be referred as a new of
protection which has replaced tariffs.

Non tarrif trade barriers

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