Agreement on Technical Barriers to Trade (TBT) & Non Tariff Barriers (NTB’s)

Agreement on Technical Barriers to Trade (TBT)

&Non Tariff Barriers (NTB’s)

Dr. Yogesh BandhuGiri Institute of Development Studies

Lucknow

Workshop on WTO

Uttar Pradesh Academy of Administration & Management

Lucknow

July 8th 2010

What is a Trade Barrier

• -Import duties• -Import quotas • -Import licenses• -Tariffs • -Export licenses• -Subsidies • -Non-tariff barriers to trade• -Voluntary Export Restraints

8/20/2010 2Yogesh Bandhu- GIDS, Lucknow

Economic Effect of Trade Barriers-Common Arguments

• Jobs Are Destroyed by Trade• Worker Wages Are Hurt by Trade.• National Security Is Threatened by Trade.• Special Industries with Unique and Substantial

Economic Potential will not mature without Protection from Trade.

• Unfair Competition Undermines the Benefits of Trade.


Non-Tariff Barriers Affecting Market Access


The TBT Agreement• Technical regulations and product standards may vary from

country to country.

• Having many different regulations and standards makes life difficult for producers and exporters.

• If regulations are set arbitrarily, they could be used as an excuse for protectionism.

• The Agreement on Technical Barriers to Trade tries to ensure that regulations, standards, testing and certification procedures do not create unnecessary obstacles.

• Seeks to ensure that technical standards and regulations do not cause unnecessary barriers to trade:


The WTO Agreement on TBT Covers

• Technical regulations which lay down product characteristics or their related processes and

• production methods, with which compliance is mandatory.

• Standards, approved by a recognized body and which set out rules, guidelines or characteristics

• for products or related processes and production methods, with which compliance is not mandatory.

• Technical regulations and standards relate mainly to industrial goods, raw materials and agricultural inputs.

• Measures imposed for the protection of human, animal and plant life or health are covered by the WTO

• Agreement on the Application of SPS.


Definition of NTBs• 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.

• Non-Tariff Barriers include all measures, other than tariffs, that are used to protect domestic industry and discourage imports


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


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.


Invisible Barriers to Trade

• Non Transparent and cumbersome Administrative Procedures and Government Policies and Regulations

• Market Structure

• Institutional Factors


Non Tariff Barriers Indian Experience

• Lack of information

• Lack of Adequate Banking Relations

• Application of standards

• Visa Restrictions

• Communication Problems

• Trade Logistics


TBT Agreement: Technical regulations• Technical regulations and standards set out specific

characteristics of a product - such as its size, shape, design,functions and performance, or the way it is labelled orpackaged before it is put on sale

• In certain cases, the way a product is produced can affectthese characteristics, and it may then prove more appropriateto draft technical regulations and standards in terms of aproduct's process and production methods rather than itscharacteristics per se

• The TBT Agreement makes allowance for both approaches inthe way it defines technical regulations and standards


Key Features

• Objective - Protection of human safety or healthProtection of animal and plant life or health Protectionof the environment Prevention of deceptive practices

• National Treatment

• Shall not create unnecessary obstacles to internationaltrade

• Shall not be more trade restrictive than necessary

• As far as possible international standards should beused


Conformity Assessment Procedures

• These are technical procedures - such as testing,verification, inspection and certification - whichconfirm that products fulfill the requirements laiddown in regulations and standards

• Exporters bear the cost, if any, of theseprocedures

• Non-transparent and discriminatory conformityassessment procedures can become effectiveprotectionist tools


Technical Barriers to TradeWTO Agreements

• Rules for international trade being written through various WTO Agreements

• Rules pertaining to Standards, Regulations and Conformity Assessment for Trade in Goods are laid down in

Agreement on Sanitary and Phyto Sanitary Measures (SPS)

Agreement on Technical Barriers to Trade (TBT)


TBT Agreement• Applies to all products incl industrial and agricultural

products

• Voluntary standards & Technical regulations (mandatory stds)-notification to all members

• Code of good practice for standards development

• Product requirements in terms of performance rather than design or descriptive characteristics

• Technical regulations of local governments below central government t to be similarly notified


What Measures are Subject to TBT Provisions?


Disciplines of the TBT Agreement

Non Discrimination

Avoidance of unnecessary obstacles to trade

Harmonization


Non-Discrimination

National Treatment Clause

Domestic Market

Most Favored Nation Clause

International Market


The Harmonization Principle to Meet International Standard

National security requirements

Fundamental climatic or other

geographical factors

Protection of animal or plant life or health

Technological & infrastructural

problems

Prevention of deceptive practices

Protection of the human health


Set of Principles for International Standards

Transparency

Openness

Impartiality & Consensus

Effective & Relevance

Coherence

Development Dimension


TBT Agreement-Notification Conditions

A relevant international standard

does not exist

The measure is

not in accordance

with the standard

The measure

may have a significant effect on trade of

other members


How WTO Agreements Concern My Business?

• Progressive liberalization of trade through successive negotiations has led to lower (or zero) import duties, and thus increased export opportunities, especially in developed country markets.

• It has also created greater predictability of market access by “binding” reduced (or zero) tariff rates.

• Most governments impose technical regulations or standards on (domestic and imported) products to protect human, animal or plant life or health, as well as the environment.

• National enquiry points, can provide information on national laws and regulations that affect your business.

• Enquiry points are usually ministries of trade, agriculture or national standardization institutes.


Responsibilities of Enquiry Point

Dissemination & Understanding of TBT related information

Preparing Country’s stand on TBT Notifications

Arranging Workshops/ Seminars for sensitizing other relevant agencies

Export Alert Service


Bureau of Indian Standards (BIS)

• The Product Certification Scheme of BIS aims at providing Third Party Guarantee of quality, safety and reliability of products to the ultimate customer.

• Presence of ISI certification mark known as Standard Mark on a product is an assurance of conformity to the specifications. The conformity is ensured by regular surveillance of the licensee's performance by surprise inspections and testing of samples, drawn both from the market and factory.

• Established 1947 – Indian Standards Institution (ISI) – registered as society - Statutory status since 1987 after enactment of BIS Act 1986

• Engaged in standards formulation, certification, testing and related activities including standards promotion & consumer education

• Representing India in ISO & IEC - participant in Codex work


Mandatory BIS Certification109 Products

• Food Colours & Food Additives

• Cement

• Gas Cylinders

• Electrical Appliances

• Infant Milk Products

• Pressure Stoves

• Steel Tubes

• Miners’ Safety Equipment

• Packaged Drinking Water and Natural Mineral Water

• Thermometers


INDIA FOREIGN TRADE – QUALITY REGULATION

FOR IMPORTS:

Directorate General of Foreign Trade

Relevant Regulatory Agency

BIS for 109 Products

FOR EXPORTS:

Export Inspection Council for about 1000 notified products (Food, footwear, chemicals, engineering, leather, jute etc)


Operational Area

• Textiles

• Chemicals and Pesticides

• Rubber and Plastic products

• Cement and concrete products

• Building materials

• Pumping, irrigation, drainage and sewage equipment

• Pipes and fittings for water supply

• Basic metals and fabricated metal products

• Machinery and equipment

• Electrical, electronics and optical equipment

• Automotive components

• Agriculture, food and tobaccos

• Black tea and beverages

• Packaged drinking water and Natural mineral water

• Leather products

• Wood products

• Paper and pulp products

• Testing instruments


Role of BIS as Enquiry Point

Answering Enquiries Market Access

Mandatory BIS Certification

Acceptance of CE Marking

Acceptance of IECCB Scheme

Equivalence of Standards

Handling TBT Notifications


India – Regulatory Agencies- Directorate General of Health Services PFA

– Ministry of Food Processing Industry FPO

– Department of Industrial Policy & Promotion BIS & EC Acts

– Directorate of Marketing and Inspection AGMARK

– Department of Agriculture & Cooperation Plant Quarantine

– Department of Animal Husbandry & Dairying MMPO

– Department of Legal Metrology Weights & Measures Act

– Bureau of Energy Efficiency Energy Conservation Act

– Chief Controller of Explosives Indian Explosives Act

– Directorate General of Mines Safety Coal Mines Regulations

– Ministry for Road Transport CMVR

– Central Pollution Control Board


Some Acts/Regulations/Control orders India Prevention of Food Adulteration Act 1954

Plant Quarantine (Regulation of Import into India) Order, 2003

Meat Food Product Order 1973/ Milk And Milk Product Order 1992

Bureau Of Indian Standards Act, 1986/ Energy Conservation Act, 2001

Standards On Weight And Measurement Act 1976/ AGMARK Act 1937

Livestock Importation Act 1898 / Essential Commodities Act

The Infant Milk Substitutes, Feeding Bottles and Infant Foods Act

Export (Quality Control and Inspection) Act, 1963/ Indian Explosives Act


India -Notification Authority & Enquiry Points

Department of Commerce, Ministry of Commerce-Notification Authority for India.

Bureau of Indian Standards –

Designated TBT Enquiry Point by Ministry of Commerce

Ministry Of Health & Ministry of Agriculture-

SPS Enquiry Points


Expectations from Stakeholders

Examination of TBT Notifications Aspects to be considered:

Are these Notifications in accordance with International Standards ? Are the requirements trade restrictive ?Are they stricter than International Standards than necessary to meet the legitimate objectives of:

Protection of human health or safety Animal or Plant life or health Environment

Are these Scientifically Justified ?


Responsibilities of WTO Member Countries

Participate in International Standards Setting

Be Proactive not Reactive to TBT Notifications

Project Regional Concerns


Thank [email protected]

(+91) 94151 18971


• Controversial monetary aid program

• Structural adjustment program

• Removal of all internal subsidies

• Jamaican milk subsidies

• Common Agricultural Policy (CAP)

• Guaranteed minimum prices

• Import tariffs and quotas on products outside EU

• Conflict between US and EU

• Subsidies resulting from political/economic reasons rather than real demand from producers

• Increasing demand for fuel-efficient, eco-friendly vehicles

• Differences in US and European safety regulations inhibiting

trade8/20/2010 39Yogesh Bandhu- GIDS, Lucknow

Agreement on Technical Barriers to Trade (TBT) & Non Tariff Barriers (NTB’s)

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Transcript of Agreement on Technical Barriers to Trade (TBT) & Non Tariff Barriers (NTB’s)