NTBs Under NAMA Negotiations A South Asian Perspective

1
NTBs Under NAMA NegotiationsA South Asian
Perspective

• By
• CUTS-CITEE Research Team
• Pranav Kumar
• Simi T B
• Chandan Mukherjee

2
Presentation Coverage

• Theory
• Definition, Classification Measurement Problems
• NTBs in Multilateral Trade Negotiations
• Tokyo, Uruguay and Doha Round
• Progress on NTBs Negotiations in Doha Round
• Approach, Notification
• Notification by South Asian Countries
• India, Pakistan and Bangladesh
• Composition of Mfg. Exports from South Asia

3
Definition of NTBs

• Baldwin (1970), Walter (1972), Mayer Gevel
  (1973), and Deardorff Stern (1997) have
  provided their definitions to NTBs.
• UNCTAD, OECD, PECC too contributed in formulation
  of the term NTBs
• No legal definition of NTBs in WTO Agreements
• NTB are measures, other than tariffs, that are
  connected with state (administrative) activity
  and influence prices, quantity, structure and/or
  direction of international flows of goods and
  services as well as resources used to produce
  these goods and services.

4
Non-tariff Measures (NTMs) Vs. Non-tariff
Barriers (NTBs)

• For several countries both NTB and NTMs are mere
  synonymous terms, for others these two are quite
  different.
• As per OECD, NTMs are defined as policy measures
  that have the effect of limiting trade, with no
  implied judgment on the legitimacy. Whereas, NTBs
  are defined as instruments that are in violation
  of WTO law.
• The raison d'être for using the term measure
  instead of barrier is primarily due to the
  reality of few cases where policies that
  stimulate the volume of trade rather than retard
  trade, such as exports subsidies, cannot be held
  as a barrier. A barrier means prevention of
  something, now here it is the trade.

5
Classification of NTBs

• UNCTADs Coding System of Trade Control Measures
  is the most comprehensive classification system
• At its most detailed level, the classification
  identified over 100 different types of NTBs at
  its most detailed level though it does not
  incorporate any measures applied to production or
  to exports.
• This classification comprises of six
  categories/chapters of NTBs, including price
  control measures, finance measures, automatic
  licensing, quantity control measures,
  monopolistic measures and technical measures.
• These chapters on NTBs begin from chapter 3 to
  chapter 8, while chapter 1 and 2 are on tariff
  and Para-tariff measures.

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Measurement of NTBs

• Frequency-type measures
• QRs and similar specific limitations
• Non-tariff charges and related policies
• Govt supports and other restrictive practices
• Customs and administrative procedures
• Technical barriers to trade
• Price-comparison measures
• Quantity-impact measures

7
NTBs in Multilateral Trade Negotiations

• In Tokyo Round, there was a comprehensive effort
  to reduce trade obstacles stemming from tariffs
  and NTMs
• New or reinforced agreements called codes, were
  reached on the following NTMs
• subsidies and countervailing duties
• government procurement
• technical standards
• import licensing procedures
• customs valuation and
• antidumping.

8
NTBs Negotiations Under Uruguay Round

• WTO (URA) does not ban the use of all NTMs
• In many ways URA on NTMs are an ext. of Tokyo
  Round
• Binding multilateral agreements signed on AD,
  subsidies, SPS, TBT, safeguards, MFA etc.
• The objective was to discipline and allow only
  legitimate NTMs
• UR results see a reduction in the use of some
  important NTMs ERAs, QRs, export subsidies etc.
  

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Doha Mandate on NTBs

• Seeks reduction or elimination of NTBs in
  particular on products of export interest to
  developing countries
• Elaborated further in July Package and Hong Kong
  Declaration
• Notification
• Identification
• Examination
• Categorisation
• To begin negotiations

10
Progress on NTBs Negotiations

• Tariff reduction has been the main thrust area,
  discussion on NTBs has received less attention
• At the WTO General Council meeting in July 2004,
  Members reiterated the importance of NTBs to the
  NAMA negotiations in the Annex B The agreement
  reads as follows
• "We recognise that NTBs are an integral and
  equally important part of these negotiations and
  instruct participants to intensify their work on
  NTBs. In particular, we encourage all
  participants to make notifications on NTBs by 31
  October 2004 and to proceed with identification,
  examination, categorization and ultimately
  negotiations on NTBs. We take note that the
  modalities for addressing NTBs in these
  negotiations could include request/offer,
  horizontal, or vertical approaches and should
  fully take into account the principle of special
  and differential treatment for developing and
  least-developed country participants."
• 32 WTO Members submitted notifications, 19 of
  which are developing countries. So far only three
  African countries (Egypt, Kenya, and Senegal),
  and one LDC (Bangladesh) have submitted
  notifications.
• Following this, the WTO Secretariat provided
  compilations of the proposals submitted regarding
  NTBs. The compilation, dated 29 October 2004,
  consolidated 26 submissions and distilled three
  central issues for discussion whether to address
  the broad range of NTMs identified or whether to
  limit the focus the appropriate WTO Committee or
  negotiating group in which to address the NTBs
  and the appropriate modalities (in other words,
  methodology) for negotiation of NTBs.

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Notifications from South Asia

• Till February 2006, countries like Japan, Korea,
  US, Argentina, Croatia, US, Cuba, Egypt, India,
  Mexico Singapore, Taiwan, Bulgaria, Norway,
  Venezuela, Hong Kong and some others have made
  notifications to the WTO on NTBs.
• The notifications are mostly in the areas/sectors
  like automobiles, chemicals, electrical, energy,
  environmental goods, fish and fish products, LAB
  foods, forest products, LAB Generic, Health and
  safety, REG Leather, Minerals, Petroleum,
  Pharmaceuticals, Phyto sanitary and textiles. The
  notifications are submitted to technical Barriers
  to Trade (Agreement/Committee), NGMA, Sanitary
  and Phytosanitary (Agreement / Committee),
  Negotiating group on Rules and others.
• From South Asia India, Bangladesh and Pak have
  notified

12
Notification from India

• India has submitted notifications on NTBs along
  with other countries to the NGMA. India in its
  submission has stated that restrictive standards,
  burdensome regulations and procedures in several
  countries have been acting as barriers that
  significantly affect exports as also the capacity
  to trade. Several issues are involved with the
  NTBs some of the measures clubbed together
  affect individual consignments, while some like
  those involving costs put additional burden on
  exports.

13
Notification from Bangladesh

• Regarding the inventory of non-tariff barriers,
  the authorities of Bangladesh gathered
  information from Chambers, associations and
  individual exporters. The NTBs faced by exporters
  are of different nature, and are categorised in
  the following broad areas
• (a) NTBs similar to SPS measures (b) NTBs
  related to TBT measures (c) Quantitative
  restrictions including ban (d) Labeling
  requirement (e) Rules of Origin (f) Visa
  requirement

14
Notification from Pakistan

• Notifications put forward by Pakistan to the
  Negotiating group on market access for the NTBs
  faced by its exporters includes
• Due to the pre-shipment inspection required by
  certain countries for certain goods, shipments
  get delayed and importers avoid sourcing from
  Pakistan.
• Non-transparent procedure for registration of
  drugs provides undue protection to domestic
  pharmaceutical firms in many countries and the
  foreign pharmaceutical companies and drug
  suppliers are denied market access.
• The registration procedures as laid down by the
  Agreement on Trade-related intellectual property
  rights needs to be made transparent.
• Quarantine certification food labeling and
  packaging regulations description of food
  ingredients indication of nutritional
  claims-substantiated and specified, high rate of
  inspection etc raises the cost of export and
  delays the shipment of consignments for the
  countries not having preferred status through
  bilateral MOU
• The food sanitation law requirements are also too
  stringent and need to be brought at par with
  internationally accepted standards.
• This trade restrictive requirements needs to be
  eliminated for products like Art silk fabrics and
  art silk garments. The Azo Dyes certification
  test results differ from laboratory to laboratory
  and this leads to denial of market access and
  also increases costs to exporters.

15
Categorising NTBs

• In its compilation of proposals submitted by
  Members on NTBs, the Secretariat identified four
  categories of NTBs
• Category 1 are those that are covered by an
  existing WTO Agreements and do not have a
  specific separate negotiating mandate.
• Category 2 are those that are covered by a
  specific WTO Agreement and are also subject of a
  specific separate negotiating mandate.
• Category 3 are defined as barriers that are not
  specifically covered in an existing WTO
  Agreement, but that are related to aspects of the
  Doha Work Programme.
• NTBs in Category 4 are classified as barriers
  that are not covered in a specific WTO Agreement,
  and are not the subject of a separate negotiating
  mandate.

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Categorising NTBs

• Category 1 SPS, TBT, RoO, Import Licensing etc.
• Category 2 Anti-dumping and Subsidies
  Countervailing Measures (SCMs)
• Category 3 Trade Facilitation measures
• Category 4 Outside the existing WTO agreements
  and Doha Agenda

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Composition of Mfg. Exports from South Asia

• Bangladesh
• RMG (Woven and Knitware), Jute products, Frozen
  foods and Leather leather products
• India
• textiles and RMG, gems and jewelry, engineering
  goods, transport equipments, machinery, chemical
  products, leather products, handicrafts etc.
• Nepal
• RMG, Woollen carpets, Pashmina products,
  Handicrafts, Silver jewelleries
• Pakistan
• Textiles garments, Leather leather products,
  sports goods, Carpets, surgical instruments
• Sri Lanka
• Processed food, textiles apparel, gems etc.