Abstract

Today many countries struggle to understand the various Non-Tariff Measures (NTMs) regulations and they reach out to international organizations in understanding and streamlining the policies. It is especially important for the private sector involved in international trade to be aware of these regulations apart from the regular tariffs that are applied in trade. Hence, in order to address the issues arising from the use and the impacts of NTMs, it is necessary to develop accurate and reliable measures, especially for policymakers. In this study, most effective methods for quantifying NTMs will be assessed to help promote new research, better understand of existing NTMs, streamline and improve existing regulations, and eliminate barriers to trade, to promote free trade.

The indicators listed in this paper are a combination of existing NTM indicators defined earlier, expanding the earlier defined indicator coverage and defining new indicators, including indicators that consider tariff data from UNCTAD TRAINS database. This paper aims at documenting the measurements of NTM indicators based on the World Integrated Trade Solution (WITS) database in which data is available for more than 90 countries. These cross-country comparable NTM indicators will help researchers, policy makers, economists, and governments to better assess the impact of NTMs on trade and formulate policies to further liberalize trade.

Abbreviations and Terms used in the document

NTM Non-Tariff Measure

SPS Sanitary and Phytosanitary measures TBT Technical barriers to trade HS 6 Products Products at the Harmonized System 6-digit level NTM Chapters Highest level NTM measures as classified by UNCTAD

NTM Leaf Level The lowest 2 or 3-digit sub-classification within an NTM chapter

TNT Transparency in Trade initiative is a joint initiative of the African Development Bank (AfDB), the International Trade Centre (ITC), the United Nations Conference on Trade & Development (UNCTAD), & the World Bank. TNT aims to facilitate the collection of tariffs & NTMs & other trade data, harmonization of NTMs, & provide free & open access to the data collected.

TRAINS Trade Analysis Information System database on tariff compiled by UNCTAD

WITS World Integrated Trade Solution

I. INTRODUCTION

While some Non-Tariff Measures (NTMs) are necessary there are others that can be an impediment to free trade. Countries themselves struggle to understand the various NTM regulations and they reach out to international organizations in understanding and streamlining the policies. In addition, private sector agencies involved in international trade need to be aware of these regulations apart from the regular tariffs that are applied in trade. Therefore, analyzing NTMs data is very important in understanding and improving trade policies. To address the issues arising from the use and the impacts of NTMs it is necessary to develop accurate and reliable measures especially for policymakers.

NTMs data collection started under the Transparency in Trade (TNT) initiative and currently; there is data available for more than 90 countries in the World Integrated Trade Solution (WITS) software. The United Nations Conference leads the data collection on Trade and Development (UNCTAD). The collected data provides a list of NTMs, information about regulations, and products and countries that are affected from NTMs. The collected information is a compilation of NTM regulations in a country but does not help to compare NTM metrics across the country.

The proposed NTM indicators will help researchers, policy makers, economists, and governments to better assess the impact of NTMs on trade and formulate policies to further liberalize trade. In this study, most effective methods for quantifying NTMs will be assessed to help promote new research, better understand existing NTMs, streamline and improve existing regulations, and eliminate barriers to trade to promote free trade.

This paper aims at defining a comprehensive list of NTM indicators that can be derived using the raw NTM data available through the databases available via WITS and aims to help assess the pervasiveness and effects of NTMs. The indicator list is a combination of existing and new indicators. For existing indicators, we have made references to the

original paper. If there are any omissions, please bring it to our notice and we will correct it. This will be an important step in assessing the impact of NTMs on trade. A module in WITS will be created for users to access the indicators. This data has been made available as a global public good for users to browse, visualize, query, and download these indicators.

II. ASSUMPTIONS:

There are certain assumptions made for calculation of the indicators. This section is important to better understand the methodology used. Users must read this section and if they need to use a different methodology, for purpose of their analysis. Partial coverage at HS6 digit level is not considered, though it is made available as metadata along with the product. Partial coverage happens when not all tariff line products under six digits are affected by NTM. The other assumption is while counting NTM measures at NTM leaf level, the number of regulations affecting the measure is not considered. For example, if a single tariff line product is subject to NTM measure A33 and this measure is derived from more than one trade regulation, it is still counted as one measure. The information about the number of regulations is provided in the metadata. The indicator calculation is performed for countries whose NTM data was collected from 2015.

The rest of the paper is organized as follows. Section 3 describes the definition and classification of NTMs and Section 4 focuses on formulating each of the NTM indicators. Finally, Section 5 provides concluding remarks.

III. Definition and Classification of NTMs

NTMs were often defined as non-tariff barriers (NTBs) that governments needed to remove to further integrate their economy into the world economy. These measures can distort international trade by raising trade costs, diverting managerial attention, and penalizing small exporters and those located in low-income countries where access to legal and regulatory information is difficult. Therefore, countries imposing NTMs may end up hurting their own competitiveness by making it difficult for domestic producers and exporters to access critical inputs in a timely fashion (Cadot et al., 2012).

Because tariffs on imports of manufactures have been reduced to relatively low levels in the major industrialized countries especially as the result of the periodic rounds of multilateral trade negotiations, there has been increasing interest in the extent to which existing NTBs may distort and restrict international trade (Deardorff and Stern, 1997). For example, measures such as quality standards, although generally imposed without protectionist intent, may be of particular concern to poor countries whose producers are often ill equipped to comply with them (UNCTAD, 2013).

These measures can also be important tools used for protectionist reasons. In this case, by increasing associated costs NTMs increase the trade-related costs, which makes business sector products less competitive in the destination market. The increase in costs resulting from applying an NTM penalizes not only producers in the exporting country but also businesses and final consumers in the importing country. On one hand, they can impose additional fixed costs on exporters who have to adapt products to the

specific standards and regulations applied by the importing country. On the other hand, conformity assessment procedures, such as testing to demonstrate compliance with these technical measures, may induce additional costs (Cadot et al., 2012).

The commonly used definition of NTMs by UNCTAD (2010) is that “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”. In other words, other than ordinary customs tariffs, NTMs are not mere numbers—they are complex texts that are not easily amenable to quantification, comparison, or even standard formatting (Cadot et al., 2012) which can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both (UNCTAD, 2010).

According to the classification of the United Nations Conference on Trade and Development (UNCTAD), NTMs are categorized depending on their scope and/or design and are broadly distinguished in technical measures (SPS) measures, TBTs and pre-shipment inspections and non-technical measures (UNCTAD, 2013) including export measures, trade-related investment measures, distribution restrictions, restrictions on post-sales services, subsidies, measures related to intellectual property rights and rules of origin (Cadot et al., 2012). A brief description of the various chapters is provided in Box 1 in the Appendix.

IV. NTM Indicators: Methods of Measurement

It is important to look at the specific details of the implementation of the NTMs in order to quantify the particular occurrence of an NTM in each country. This section includes a combination of NTM indicators defined by other authors and new indicators.

In this section, each of the indicators of the NTMs and their formulas is described. At a high level, these indicators can be classified under the following Categories

i. Country Level: These are indicators that have only the country dimension. For example, Total Number of leaf level NTM in force in a country, Total Number of HS6 digit product affected by one or more NTM.

ii. Country Trade Flow: A combination of country and the NTM measures related to export and import trade flow.

iii. Country Product/Sector: This includes taking into account products or sectors instead of total trade.

iv. NTM Tariff: Combining NTM indicators with tariff data. Another method of categorizing the data is by

i. Count: General count of the number of measures, products ii. Ratio: This includes frequency and coverage ratio

Metadata to be supplied with the indicators:

Source, Year of the collection, partial coverage included y/n, more than one regulation in force for one NTM measure (y/n), link to raw NTM data for the country.

Below is the list of indicators identified

1. Number of NTMs (leaf level) *

It is extremely difficult to process the diverse direct information that is available on each NTM in a way that will be comparable across NTMs and thus permit them to be added up to obtain a total measure of trade interference (Deardorff and Stern, 1997). Direct information about NTMs is likely to be the most accurate available, and therefore this indicator provides the different type of unique “NTMs at leaf level” that are in force in a country. However, this indicator only helps in assessing the total amount of measures enforced by a country because each measure may be affecting more than one product. For each country cc1,…,ci the number of NTMs can be expressed as:

c=ci ∑tj∑mk Dci,tj,mk

where if a measure m (m1,…,mk) is applied to the tariff line item t(t1,…,tj), the dummy variable Dci,tj,mk takes the value of one and zero if there is no NTM.

2. Number of HS6 products subject to NTMs*

This measure provides the number of products at HS6 digit level subject to one or more NTM. The incidence of the use of NTMs depends on both the number of products affected by NTMs and the number of NTMs affecting each product. Even though a product may be affected by multiple measures, this indicator only gives an idea of the number of unique product at the HS6-digit level that is affected by one or more NTM. For each country cc1,…,ci the number of product categories subject to NTMs can be expressed as:

c=ci ∑t=1t=j(Dci,tj,mi,…,Dci,tj,mk)

where if a measure m (m1,…,mk) is applied to the tariff line item t(t1,…,tj), the dummy variable Dci,tj,mk takes the value of one and zero if there is no NTM.

3. Total HS6 Product and NTM measure count*

While NTM leaf level gives an idea of the number of distinct NTM measure in force and Number of HS6 products affected by one or measure, we also need to know the combination to understand the pervasiveness of NTM’s. This measure will give a total count of unique HS6 product and NTM leaf level count. If this count is much high than the number of hs6 products subject to NTM, it gives an understanding that products are subject to more than one NTM.

4. Number of products subject to specific NTMs*

This indicator further helps us understand how many NTM affect each product. This indicator is given by simply counting the products affected by one or more import NTM of the same type (A, B, C). For each country cc1,…,ci the number of product categories subject to NTMs can be expressed as:

c=ci ∑t=1t=j ∑m=1m=k(Dci,tj,mi,…,Dci,tj,mk)

where if a measure m (m1,…,mk) is applied to the tariff line item t(t1,…,tj), the dummy variable Dci,tj,mi takes the value of one and zero if there is no NTM.

5. Pervasiveness Score

The pervasiveness score indicates the number of different NTMs to which a product is subjected (Ferrantino et al., 2012; and UNCTAD, 2010, 2013, and 2016). This can be used to identify what product is affected by the largest number of NTM, how many NTMs on average apply to a group of products (UNCTAD, 2016). For example, one specific good may be subject to geographical restriction, labeling, fumigation, and some conformity assessments, which all fall under the SPS chapter (UNCTAD, 2013). In addition, a product could also be subject to measures from different chapters such as SPS, quality, and licensing. Details of the Chapters are given in Box 1 in the Appendix.

6. Coverage Ratio

A measure of the importance of NTMs in terms of overall import value is given by the coverage ratio (Bora et al., 2002; Ferrantino et al., 2015; and UNCTAD 2010, 2013, and 2016). The coverage ratio is calculated by determining the value of imports of each commodity subject to NTMs, aggregating by applicable HS commodity group, and expressing the value of imports covered as a percentage of total imports in the HS commodity group (Deardorff and Stern, 1997). This will provide a percentage of product affected by one or a group of NTMs, with the total product at HS 6-digit level imported in a particular year. The percentage of imports subject to NTMs for a country cc1,…,ci at the desired level of product aggregation can be given by the coverage ratio as:

CR=DtjVtjVtj×100

where if a measure m m1,…,mk is applied to the tariff line item t(t1,…,tj), the dummy variable Dtj takes the value of one and zero if there is no NTM; and Vtj is the value of imports in item j.

7. Frequency Ratio

The frequency ratio accounts for the presence or absence of a NTM and indicates the percentage of traded products to which one or more NTMs are applied (Bora et al., 2002; Ferrantino et al., 2015; and UNCTAD 2010, 2013, and 2016). The percentage of trade subject to NTMs for a country cc1,…,ci at the desired level of product aggregation can be given by the frequency ratio as:

FR=DtjMtjMtj×100

where if a measure m (m1,…,mk) is applied to the tariff line item t(t1,…,tj), the dummy variable Dtj takes the value of one and zero if there is no NTM; and Mtj indicates the value of one and zero if there are no imports of item j.

8. Percentage of import measures*

This will give the percentage of unique import measures to total measure.

mk import NTMci,tjmktotal NTMci,tj×100

9. Percentage of export measures*

This will give the percentage of unique export measures to total measures.

mk export NTMci,tjmktotal NTMci,tj×100

10. Percentage of individual measures*

This measure gives the percentage by unique measure type. For example percentage of SPS or percentage of TBT

11. Percentage of individual measures with products*

The percentages of measures taking into account the affected products.

12. Measures by sector*

This gives the percentage of products within a sector affected by one or more NTM. The sector used is based on HS Sector defined by WCO like Animal, Vegetable etc.

13. Percentage of traded product affected by individual measures*

Percentage of traded products affected by NTMs to the total number of trade flows in a specific year.

HS6 number of trade flows under NTMtjHS6number of trade flowstj×100

14. Percentage of imports affected by individual measures*

Percentage of total value of imports of all imported product affected by NTM to the total import in a specific year.

HS6 imports under NTMtjHS6total importstj×100

15. Percentage of duty-free imports affected by NTM*

This is the ratio of imported product having zero tariffs that are affected by one or more import NTM measure by a count of all imported products that have zero tariffs.

16. Percentage of duty-free imports affected by individual measures*

This is the ratio of the count of import products having zero tariffs affected by a particular NTM measure by the count of all import products that have zero tariffs.

17. Duty-free import affected by NTM*

This is the total value of imports of products that have zero tariffs but affected by one or more NTM measure by total duty-free imports.

18. Duty-free import affected by individual measure*

This is the total value of imports of a product that have zero tariffs but affected by a specific NTM measure.

V. ACKNOWLEDGEMENTS

This paper was compiled by Michael Ferrantino and Siddhesh Kaushik from the World Bank. The authors thank the various reviewers from the World Bank and UNCTAD. The authors would like to thank the World Bank IT team for the setup of the database and for creating a module to disseminate the NTM indicators.

The authors would like to thank Niharika Hanglem, and Emine Elcin Koten for their help in compiling this document. This work was supported with funding from the World Bank’s Knowledge for China Program.

VI. CONCLUSION

Policymakers can use the information from this paper to help quantify NTMs, promote research, better understand existing NTMs, streamline and improve regulations.

The WITS system has available cross-country comparable NTM indicators which helps assess the impact of NTMs on trade and formulate policies to further liberalize trade.

VII. REFERENCES

Bora, Bijit, Aki Kuwahara, and Sam Laird (2002). “Quantification of Non-Tariff Measures,” No. 18, United Nations Publications.

Cadot, Olivier, Mariem Malouche, and Sebastián Sáez (2012). “Streamlining Non-Tariff Measures: A Toolkit for Policy Makers,” World Bank, Washington D.C.

Deardorff, Alan V., and Robert M. Stern (1997). “Measurement of Non-Tariff Barriers,” OECD Economics Department Working Papers, No. 179, Paris: OECD Publishing.

Ferrantino, Michael (2006). "Quantifying the Trade and Economic Effects of Non-Tariff Measures," OECD Trade Policy Papers, No. 28, OECD Publishing, Paris.

Ferrantino, Michael J., Jose-Daniel Reyes, and Gabriela Schmidt (2015). “Regulatory Framework for Trading in Tajikistan,” World Bank (to be published).

UNCTAD (2010). “Non-Tariff Measures: Evidence from Selected Developing Countries and Future Research Agenda,” United Nations, New York, and Geneva.

UNCTAD (2013). “Non-Tariff Measures to Trade: Economic and Policy Issues for Developing Countries,” United Nations, New York, and Geneva.

UNCTAD (2016). “Trains: The Global Database on Non-Tariff Measures,” United Nations, New York and Geneva (to be published).

APPENDIX

Box 1: Description of the Chapters in the Classification of NTMs

Chapter A on sanitary and phytosanitary measures refers to measures affecting areas such as restriction for substances and measures for preventing dissemination of disease. It also includes all conformity assessment measures related to food safety, such as certification, testing and inspection, and quarantine.

Chapter B on technical measures refers to measures such as labeling and other measures protecting the environment, standards on technical specifications and quality requirements.

Chapter C classifies the measures related to pre-shipment inspections and other customs formalities.

Chapter D groups contingent 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 fulfillment of certain procedural and substantive requirements.

Chapter E on licensing, quotas and other quantity control measures groups the measures that are intended to limit the quantity traded, such as quotas. It also covers licenses and import prohibitions that are not SPS- or TBT-related.

Chapter F groups price control 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 tariff measures, that increase the cost of import in a similar manner (para-tariff measures)

Chapter G on finance, measures refer to measures restricting the payments of imports, for example when the access and cost of foreign exchange are regulated. It also includes measures imposing restrictions on the terms of payment.

Chapter H refers to measures affecting competition. These measures grant exclusive or special preferences or privileges to one or more limited groups of economic operators. They refer mainly to monopolistic measures, such as State trading, sole importing agencies, or compulsory national insurance or transport.

Chapter I on trade-related investment measures groups the measures that restrict investment by requiring local content, or requesting that investment should be related to exports in order to balance imports.

Chapter J on distribution, restrictions refer to restrictive measures related to the internal distribution of imported products.

Chapter K refers to the restriction on post-sales services, for example, restrictions on the provision of accessory services.

Chapter L contains measures that relate to the subsidies that affect trade.

Chapter M on government procurement restriction measures refer to the restrictions bidders may find when trying to sell their products to a foreign Government.

Chapter N groups 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 their inputs.

Chapter P on export measures groups the measures a country applies to its exports. It includes export taxes, export quotas or export prohibitions, etc.

Source: UNCTAD (2010)

A GUIDE TO NON TARIFF MEASURES INDICATORS

INTRODUCTION

INTRODUCTION TO WITS

World Integrated Trade Solution or WITS is a trade software developed by the World Bank in collaboration with UNCTAD, ITC, UNSD and WTO.

WITS allows a user to query trade statistics from UN COMTRADE, tariff and Non-Tariff Measures (NTM) data from UNCTAD and tariff and bound tariff information from WTO, IDB and CTS databases.

This guide on how to use NTMs in WITS was supported with funding from the World Bank’s Knowledge for China Program.

DEFINITION OF NON TARIFF MEASURES (NTM)

NTM are policy measures other than tariffs that can potentially have an economic effect on international trade in goods. They shape trade and influence it.

NTMs are a major challenge for exporters, importers & policy makers. Some NTMs aims at primarily protecting public health or the environment but they also affect trade through information, compliance & procedural costs. Others are more purely trade statistics.Examples of NTMs are regulations like packaging & labeling requirements, quotas or quantitative restrictions & non-automatic licenses on imports that affect trade. Some of these are necessary but some are an impediment to free trade. WTO rules allow countries to use NTMs to regulate their imports & exports to achieve legitimate non-trade objectives.

OBJECTIVES OF USING NTMs

NTMs can be used to:

• Correct various market failures such as informational asymmetries, and externalities (labeling requirements)

• Protect consumer health (standards, certification or labeling)

• Safeguard the environment (import ban of hazardous products)

• Protection of national industries or infant industries (import bans, non-automatic licenses, bailouts or subsidy)

NTM INDICATORS: METHODS OF MEASUREMENT

• Country Level: Indicators with only the country dimension. Example- Total no. of leaf level NTM in force, total no. of HS6 digit product affected by one or more NTM.

• Country Trade Flow: Combination of country and the NTM measures related to export and import trade flow.

• Country Product/ Sector: Takes into account products or sectors instead of total trade.

• NTM Tariff: Combining NTM indicators with tariff data.

Another method of categorizing the data is by• Count: General count of the number of measures, products

• Ratio: This includes frequency and coverage ratio

NTM CLASSIFICATION

Source: UNCTAD- WTO 2012

INTERNATIONAL NTM CLASSIFICATION BY CHAPTER

MULTI AGENCY SUPPORT TEAM (MAST) 2012 CLASSIFICATION OF NTM

• The classification of NTMs prepared by MAST encompasses 16 chapters (A to P), where each individual chapter is divided into groupings with depth up to 3 levels (one, two & three digits).

• Each of the 16 chapters (A-P) is further divided into sub-groups (up to 3 digits) to allow a finer classification of the regulations affecting trade.

• All chapters (except chapter P, which deals with exports) reflect the requirements of the importing country with regard to its imports.

NTM CLASSIFICATION BY CHAPTER: TECHNICAL MEASURES

A. SPS. Measures ensuring food safety & measures for preventing dissemination of disease or pests. Conformity- assessment measures such as certification, testing, inspection, & quarantine.

B. TBT. Measures such as labeling, standards on technical specifications & quality requirements, and other measures protecting the environment. Conformity- assessment measures related to technical requirements, such as certification, testing & inspection.

C. Measures related to pre-shipment inspections and other customs formalities.

- Refer World Trade Report 2012 for additional information

NTM CLASSIFICATION BY CHAPTER: NON- TECHNICAL MEASURES

D. Measures implemented to counter particular adverse effects of imports in the market of the importing country including measures aimed at unfair trade practices. They include antidumping, countervailing and safeguard measures.

Hard trade policy measures:

E. Licensing, quotas and other quantity control measures, including tariff rate quotas (TRQs).

F. Price-control measures implemented to control or affect the prices of imported goods. Examples include measures to support the domestic price of certain products when the import prices of these goods are lower.

Traditionally used in trade policy

NTM CLASSIFICATION BY CHAPTER: NON- TECHNICAL MEASURES

G. Measures restricting the payments of imports, for example when the access and cost of foreign exchange is regulated. Measures imposing restrictions on the terms of payment.

H. Measures affecting competition. Mainly monopolistic measures, such as State trading, sole importing agencies or compulsory national insurance or transport.

I. Trade- related investment measures, including local content requirements or measures requesting that investment be related to export in order to balance imports.

NTM CLASSIFICATION BY CHAPTER: NON- TECHNICAL MEASURES

Marketing after imports:J. Restrictive measures

related to the internal distribution of imported products

K. Restrictions on post sales services, for example, restrictions on the provision of accessory services

Behind-the-border policies:L. Measures that relate to

subsidies that affect tradeM. Restrictions bidders may

find when trying to sell to a foreign government

N. Restrictions related to IPRsO. Measures that restrict the

origin of products or its inputs

NTM CLASSIFICATION BY CHAPTER: NON- TECHNICAL MEASURES

Export Measures:P. Measures a country

applies to its exports: export taxes, export quota and export prohibitions

- See World Trade Report 2010 (section D) and World Trade Report 2014 (section D)

SPS & TBT

Similarities: • Prohibitions, tolerance

limits, labeling, safety or security requirements

• Certification, lab tests, inspection

Differences:• SPS Measures to ensure that

food is safe for consumers• To prevent spread of

pests/diseases among plants/animals/humans

• Other technical measures like quality & product harmonization, consumer protection- deception and security

IMPACT

PERSPECTIVE• Incidence

One-by-one, looking at individual measuresIncidence statistics like coverage/ frequency ratio

• ImpactDirect economic (on trade, prices)Indirect economic (employment, poverty etc)Non- economic (environment, health)

• Different contextMultilateral, Regional, Bilateral, Unilateral

• Import/exportValue chains

• Economy-wideSector or product specificMeasure- specific

SOME STYLIZED FACTS ABOUT NTMs

• They can affect prices and quantities, or both• Although applied indiscriminately, they can be

discriminatory• SPS and TBTs are most predominant of the

different types of NTMs• TBTs are more prevalent but SPS measures

are more prevalent for agri-food products• Exact extent of burden imposed by NTMs differ

among export markets

NTMS’ IMPACT ON TRADE

• Add costs to trade- standards require information and compliance

• Preclude trade- prohibitions/ stringent requirements

• Divert trade- quotas/ standards• Create trade- SPS and TBT (guarantee quality,

unify markets) increase demand for foreign products

OTHER TYPES OF IMPACT

• On trade, welfare & even income distribution• Possible impact on market structure:

- On the imposing country• NTMs can segment market & generate market power

- On the exporting country• If only big companies succeed to export

• Liberalization reduces trading costs and creates Harmonization and Mutual recognition for NTMs

NTM DATA USE

GOVERNMENT AGENCIES RESPONSIBLE FOR REGULATING TRADE

NTM Chapter Potential Government AgencyA Sanitary and Phytosanitary

Measures (SPS)Ministry of Agriculture/Health, Standardization Agency

B Technical Barriers to Trade (TBT) Standardization Agency, Ministry of Health/Ecology/ Industry

C Pre-shipment inspection & other formalities

Standardization Agency, Customs Agency

D Contingent Trade Protective Measures

Customs Agency, Ministry of Finance/ Economy/ Industry or Trade

E Non- automatic licensing, quotas, prohibitions & other quality control measures

Customs Agency, Ministry of Economy/ Industry or Trade

F Price control measures including additional taxes & charges

Customs Agency, Ministry of Economy/ Industry or Trade

G Finance measures Ministry of Finance, National Bank

H Measures affecting competition Ministry of Economy/ Industry or Trade

I Trade-related investment measures Ministry of Economy/ Industry or Trade

P Export- related measures Standardization/ Customs Agency, Ministry of Economy/ Industry/Trade/ Agriculture

POLICYMAKERS PERSPECTIVE

Two ways of looking at NTMs:

• NTMs applied abroad: Trade perspective partners

- Effects on exports and trade diversion

•NTMs applied at home: Domestic perspective

- NTMs costs (domestic prices) and benefits

3 TYPES OF DATA NOT TO BE MIXED OR MISTAKEN

1. Official measures• Requirements enacted within a legal text or regulation issued

officially by a country• Actively read all regulations from official journal and register in the

database those that are trade related• All regulations that affects trade- currently applied, official and

mandatory, detailed and specific2. Survey data

• Complaints by exporters can be compiled by governments3. Voluntary

• Private standards or international standards

Note: Notification to WTO is based on regulations but not consistently or systematically reported

WITS: A COMPREHENSIVE DATASET

• Advantages• Wide country availability• Measures can be followed over

time (since 2010)• Easily accessible and

downloadable• Disadvantages

• Measures other than contingent trade protective measures (D) only available since 2010

• Only ‘extensive margin’ information on whether the measure is in place, and on whether coverage is full or partial

TAJIKISTAN:A NTM CASE STUDY

Tajikistan: NTM Country Profile

A cotton field in Tajikistan- Image courtesy World Bank Flickr

• Tajikistan is the poorest country in Central Asia. In 2014, it’s GDP was $9.24 billion, which together with a population of 8.29 million in the same year determines its lower-middle income level status.

• Tajikistan has largely retained the comprehensive system of mandatory standards dating from the Soviet Union.The lack of well-equipped laboratories, trained staff, and transparent pricing and regulations make it particularly difficult to obtain required certifications. Tajikistan has no export tariffs.

• In 2013, Tajikistan became a member of the WTO & the country’s MFN applied tariffs’ simple average was 7.8% of total import value, with agricultural products being subject to a higher rate of 10.6% & non-agricultural products to a lower 7.4% rate. As part of the WTO accord, Tajikistan agreed to further open its trade regime.

• Tajikistan’s trade is only slightly freer than that of the average country. It’s trade is not only less open than all of its comparators, but also less open than the average country as well.

• More than half of Tajik product lines are affected by at least 1 NTM, whereas 69.80% of import value is covered by such measures, indicating that NTMs in Tajikistan are relatively concentrated in high-impact sectors or products.

• Pervasiveness of NTMs is relatively low, since a majority of products (2632 of a total of 5305 products, or 49.6%) are affected by only 1 NTM Chapter, whereas the 2nd largest group (41%) is not affected by any NTMs at all.

➢ Establish a regional framework to facilitate transit trade and cooperation on legislative matters

➢ Create an organizing body to implement such framework

➢ Set cooperation mechanisms➢ Establish common approach to risk

management➢ Create single combined database on

the movement of goods and transportation across borders

➢ Create an ICT interface between regional customs organizations

CHALLENGES

● Bottlenecks undermine the economic value of Tajikistan’s transit routes

● Obstacle to country’s exports, especially for perishable goods

● Threat to foreign investment

Improving Trade

Tajik System of Standardization, Quality Assurance,

Accreditation & Metrology (SQAM)

CHALLENGES:● Lack of expert knowledge &

experience in developing technical regulations

● Absence of clear guidelines● Lack of standardization● Majority of standards in Russian,

making it inaccessible● Charges fees for provision of

standards which is against international best practices

● Not based on scientific evidence● No systemic approach to defining

technical regulations● Information is not up to date

SOLUTIONS:● Clarify powers and responsibilities

of appropriate agencies● Define certifications in relation to

relevant agencies● Conformity assessment● Develop testing laboratories to

adhere to certification bodies● Food safety control system should

be improved to avoid duplication of functions

● Align legal requirements with international standards

● Develop testing materials and structural components

Tajikistan’s Trade Obstacles

COUNTRY TYPES OF PROBLEMS

Kyrgyzstan Freedom of Transit

IranApplication of Internal Taxes on Imports

Payments and Currency RegulationsMarket Access

Tax for Tajik Vehicles

Afghanistan TransitMarket Access

KazakhstanExport Duties

Requirement for Deposit on Alcohol for TransitCustoms Valuation

China Tariff Quotas for Import of Cotton

This table summarizes some of the main regulatory bottlenecks that Tajikistan faces in some of its main trading partners.

TAJIKISTAN

NTM Statistics on the WITS Website

NTM IN WITS

NTM’S IN WITS

Analysis of NTM data can help improve trade policies. NTM data collection started under the Transparency in Trade initiative and has data for 90+ countries.

The WITS NTM module provides access to indicators like frequency ratio, coverage ratio, prevalence score, details of NTM affected products, number of NTMs in force etc. A user can view a country summary, prevalence of NTM, sector and measure view.

Understanding NTMs: Terminology

• Sector: Based on World Custom Organizations (WCO) Sector classification for the Harmonized System (HS) product nomenclature with some minor difference.

• Coverage Ratio: Calculated by determining the value of imports of each commodity subject to NTMs, aggregating by applicable HS commodity group, & expressing the value of imports covered as a % of total imports in the HS commodity group.

• Frequency Ratio: Accounts for the presence or absence of a NTM, & indicates the % of traded products to which 1 or more NTMs are applied.

• Duty Free NTM Frequency Ratio:The duty free frequency ratio accounts for the presence or absence of a NTM for duty free products, & indicates the % of duty free traded products to which 1 or more NTMs on duty free products are applied.

• NTM Type Count: Count of NTM measures at chapter level (eg. A, B, etc.). A value of “3+ types” means the products are affected by 3 or more NTM chapters.

• NTM Affected Product- Count: Count of traded HS 6 digit products that are subject to 1 or more NTM measures.

• NTM Affected Trade: Sum of gross imports or gross exports that are affected by 1 or more NTM measures.

• NTM Affected Duty Free Imports: Sum of imports that are subject to MFN duty free tariff & affected by 1 or more NTM measures.

• Share: Ratio of number of NTM affected products, to total products.

WITS HOMEPAGEThe WITS homepage- https://wits.worldbank.org, has an entire section on NTMs. If you click on the NTMs tab, a drop down menu shows more options that includes:● Summary● By Country ● Visualization● Data Download● Metadata● Data Availability● About NTM

NTM Drop Down Menu

NTMs: Summary

The NTM summary page allows the user to check for the following data results from a comprehensive list of countries:● Top 10 most imposed NTMs● NTMs by sector● Coverage ratio (imports

and exports)● Frequency ratio (imports

and exports)The user can select the summary or prevalence or measures page as needed, additionally the user can also download the data.

Change country selection here

Select summary, prevalence or measures

To download the data, click here

In the NTM summary page, the user can view and access the data points in relation to coverage ratio, frequency ratio for both imports and exports for a chosen country. Clicking the specific product link will allow users to view various measures affecting products.

The user can view a country’s NTM by sector. NTM Frequency and Coverage ratio, total imports, NTM Affected Product count NTM affected Trade (sorted by coverage ratio). The user can also download this data.

The user can view a country’s Top 10 most imposed NTMs. NTM Frequency & Coverage ratio, total imports, NTM Affected Product count NTM affected Trade (sorted by coverage ratio). The user can download this data.

Search for specific products NTMs: Summary.. continued

In the NTMs prevalence page, the user can check for the prevalence of NTMs by sectors. This can be viewed for all sectors and can also be filtered by sector. Sectors includes the following: All import products, Animal, Chemicals, Food Products, Footwear, Fuels, Hides & Skins, Machine & Electronics, Metals, Minerals, Miscellaneous, Plastic or Rubber, Stone & Glass, Textiles & Clothing, Transportation, Vegetables, Wood. The type count of NTMS from none up to 3 can also be selected to view specific results. Again, this data is downloadable.

NTMs: Prevalence

In the NTMs measures page, the user can check for the NTMs by measures. The user can select the specific country for which s/he needs the NTM data. They can also select the measure and whether or not it is for import or export measures. The user can select the sub measure of A, B, C, E, F, G or H. The user can click on ‘show more columns’ to add or remove more indicators. Columns include: Coverage/Frequency Ratio, NTMs Affected product-count, Duty free Coverage/Frequency ratio, NTM affected duty free imports, Duty free product count, Duty free imports, NTM affected trade, Duty free total products-count, NTM partial coverage, Traded products- total, Duty free imports- total, Total trade. All of this data is also downloadable.

Select sub-measures

Show more columns

Select country or measure

NTMs: Measures

NTMs: By CountryThis page allows users to navigate directly to a specific Country Summary, Prevalence & Measure page. In addition, it provides easy navigation to effect of NTM measures on sector, & effect of specific NTM measure across sectors. ● Use this section to browse NTM

indicators for 75 countries. ● Users can view the summary for a

country, prevalence of NTM, data by individual measures, & by Sectors.

● For custom queries & to access the underlying raw data, users must register & login.

● Click on a specific country (Example- India) to get a more comprehensive snapshot of NTMs for that country.

Select country- India

NTMs: Visualization

In the NTMs Visualization page, the user can explore visualization of NTM data derived from UNCTAD TRAINS NTM database for the following:

● NTM Measure Distribution- Check which measures most in force by country. Does the country have measure (P) affecting exports?

● Sectors Affected by NTMs- Use this visualization to see in which sector is Non-Tariff Measure prevalent

● Technical vs. Non Technical Measures- Use this visualization to quickly see if a country has technical measures (ABC) or non-technical measures

NTMs: Visualization..continued

● NTM Coverage & Frequency Ratio by Sector- Use this visualization to check a country’s frequency and coverage ratio by sector. If the coverage ratio is greater than the frequency ratio it indicates the impact of NTM is high on that sector.

● Duty Free Imports Affected by NTMs- Use this visualization to quickly glance what measures affect the duty-free imports of a country is affected by one or more NTM.

● Duty Free Imports Affected by NTM Measure by Sector- Use this visualization to obtain effect of NTMs on duty free imports by sector.

NTMs: Data Download

The Data Download page gives the user access to download data for the following:● NTM Trade Frequency Coverage Ratio● NTM Prevalence Sector● NTM Indicators Measure Sector

NTMs: MetadataIn the NTM Metadata page, the user can view & access metadata for a specific country. NTM classification, product classification, trade source, NTM code count, count of partial coverage products excluded & count of bilateral partners alongwith the year NTM was last updated are all available.

In the NTM Metadata page, the user can view and access definition, source and notes on 14 indicators. This includes duty free related indicators, import products, NTM affected indicators & total trade indicators.

In the NTM Metadata page, the user can view and access the product group classification, nomenclature and description.

NTMs: Data Availability

The NTM Data Availability page displays a breakdown of the NTMs per country according to the international classification of chapters for both technical and non technical measures. Users can also view how many NTMs of a specific chapter are there and check the individual breakdown by clicking on a specific data point.

REFERENCE LINKS

• https://wits.worldbank.org• https://wits.worldbank.org/faqs.html • https://wits.worldbank.org/tariff/non-tariff-measures/en/co

untry/CAN• https://en.wikipedia.org/wiki/Non-tariff_barriers_to_trade• http://i-tip.wto.org/goods/default.aspx?language=en• https://ntmsurvey.intracen.org/publication/• https://www.macmap.org/ • http://www.tntdata.org/

ADDITIONAL RESOURCES

• NTM: What do we know, what might be done?• NTMs: An Introductionary Guide• Trade & public policies: A closer look ar NTMs in the 21st century• Analyzing EU dairy exports: indicators of NTM and gravity• Measurement of NTM: The case of Ukraine• NTM, competitiveness and the population of exporters• NTM with market imperfections: Trade and Welfare implications• http://www.oecd.org/tad/ntm/ • https://unctad.org/en/Pages/DITC/Trade-Analysis/Non-Tariff-Measures

.aspx • https://ntmsurvey.intracen.org/support-materials/ • http://www.intracen.org/itc/market-info-tools/non-tariff-measures/