SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK SEATRANET ADVANCED COURSE NON AGRICULTURAL MARKET ACCESS (NAMA) Module 5: Non-Tariff Measures SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Outline of Module Non Tariff Measures The Technical Barriers to Trade Agreement The SPS Agreement The Customs Valuation Agreement The Pre-shipment Inspection Agreement The Agreement on Import Licensing NTM agreements and WTO Negotiations SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Non Tariff Measures SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK What are Non Tariff Measures? •Any measures other than tariffs, which restrict or distort international trade are NTMs •Many NTMs are in place for legitimate reasons such as safety, security, health, public morals etc • Many are applied under Article XX providing for general exceptions But they must not be applied as a means of unreasonable or unjustifiable discrimination or as disguised restriction on trade SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK •The Uruguay Round included the negotiation of NTMs in its mandate initially through notification - Bring measures into negotiation - Strengthen governing rules - Develop surveillance mechanisms -Improve dispute settlement procedure SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Agreements related to NTMs • Five Agreements were negotiated in the Uruguay Round which are an integral part of the WTO Agreement – – – – – Technical Barriers to Trade Sanitary and Phytosanitary Custom Valuation Preshipment Inspection Import Licensing SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK The Technical Barriers to Trade Agreement SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Technical Barriers to Trade Agreement •The TBT strengthened and clarified the original plurilateral TBT Agreement negotiated during the Tokyo Round •It covers the use of technical regulations and standards to regulate the entry of traded goods SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Technical Barriers to Trade Agreement •Conformity assessment means the technical procedures such as testing, verification, inspection and certification, undertaken to confirm that products fulfill regulations and standards •Generally exporters pay the cost of conformity assessment SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Technical Barriers to Trade Agreement • Legitimate objectives of regulations and standards: – – – – • Protection of human safety or health Protection of animal and plant life or health Protection of the environment Prevention of deceptive practices Other objectives could include trade facilitation, quality regulations and regulations aimed at harmonizing certain sectors 10 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Import Licensing (IL) Non-automatic import licensing • Defined as licensing not falling within the definition of automatic • Used to administer trade restrictions such as quantitative trade restrictions justified within the WTO legal framework 45 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Import Licensing (IL) Non-automatic import licensing: Main Provisions • No additional restrictive or distortive effects •All relevant information to be published •No discrimination among applicants •Time limits for processing applications   •Validity of a licence   46 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK NTM Agreements and WTO Negotiations 47 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK NTMs and the WTO •All of these NTM Agreements have a number of elements in common - all WTO members are parties - they all require transparency - non discrimination (except SPS) - minimization of trade restriction - all directly or implicitly take into account developing countries - all have access to the WTO dispute settlement mechanism 48 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK NTMs and Current WTO Negotiations The Doha mandate for Non Agricultural products specifies that “negotiations shall aim … to reduce or as appropriate eliminate tariffs … as well as nontariff barriers, in particular on products of export interest to developing countries.” 49 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK NTMs and Current WTO Negotiations • Process began with many members notifying specific other members of measures they wanted negotiated, or more broadly • Work progressed on the categorization and examination of notified measures 50 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK • NTMs and Current WTO Negotiations Cont Doha negotiations include: – Barriers which are currently under negotiations in other negotiating groups including trade facilitation and services – Barriers related to other WTO Agreements subject to negotiation, including Anti dumping and Subsidy Countervail 51 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK • NTMs and Current WTO Negotiations Cont Doha negotiations include: – Barriers not covered by the existing Agreements and not part of the specific Doha agenda – Barriers relating to the UR Agreements that are not currently subject to negotiations, although work continues in the relevant Committees responsible for these agreements 52 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK NTMs and Current WTO Negotiations • Hong Kong Ministerial intensified development of specific modalities • Bilateral, vertical and horizontal approaches to negotiations 53 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK NTMs and Current WTO Negotiations Cont • The bilateral approach is similar to a Request-Offer in tariff negotiations – Individual countries or groups negotiate the reduction or elimination of specific measures on a case by case basis – Most agree that the results to be included in schedules and applied on MFN basis 54 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Pros and Cons of the Bilateral Approach • Many members support this method, but others also recognize that given the number and diversity of members and the complexity of each issue, use of this method alone would likely lead to minimal results 55 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Alternative Approaches • Horizontal approach is a multilateral approach where agreement is reached on commitments to be equally applicable to all members – Similar to the development of the UR Agreements 56 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Alternative Approaches • Vertical Approach • A sectoral approach with generic clusters of measures typically associated with a particular sector – Work is underway in forest, fish, automotive, and textile and clothing products – No agreement on how to be made operational – While all elements would be MFN, some are bilateral or plurilateral and would not put discipline on all members (not harmonized) 57 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Advantage of Vertical Approach • Treatment of products of specific interest to developing countries in a vertical manner could provide them increased benefits as well as defining their interests in any horizontal activities 58 SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK • Current Status Hong Kong Declaration called for the modalities to be agreed on no later than 30 April 2006, with comprehensive draft schedules no later than 31 July 2006 • As of mid-2008 agreement on modalities has yet to be achieved With the collapse of the Geneva mini-ministerial meeting, mid July, further progress will be very slow 59 ... Measures? •Any measures other than tariffs, which restrict or distort international trade are NTMs •Many NTMs are in place for legitimate reasons such as safety, security, health, public morals etc... Customs Valuation Agreement The Pre-shipment Inspection Agreement The Agreement on Import Licensing NTM agreements and WTO Negotiations SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK Non Tariff Measures... trade SOUTH EAST ASIA TRADE POLICY TRAINING NETWORK •The Uruguay Round included the negotiation of NTMs in its mandate initially through notification - Bring measures into negotiation - Strengthen