UNCTAD’s work on on Non-Tariff Barriers ( NTBs)

1. UNCTAD’s work on on Non-Tariff Barriers (NTBs) Session 2: What is UNCTAD doing to improve the current situation of NTBs information Short courses for Permanent Missions in Geneva Friday 30 October 2009

2. Background: Facts • Past 20 years, trade liberalization has been used as an effective development tool. • During this period, we have seen a continual decline of tariff rates by virtue of MTAs under WTO and PTAs at regional and bilateral level. • Reduction in tariffs has not been reflected by a reduction in NTBs. • NTBs are increasingly becoming important as countries are recurring to NTBs as alternative trade policy instruments for protectionist or regulatory purposes.

3. Background: Facts • In spite of their importance in regulating trade, there is little understanding of the exact implications of NTB on trade flows. • There is no comprehensive and continously updated informatin on NTBs. • TRAINS database (only internationally known cross country database) needs improvement.

4. UNCTAD’s INITIATIVE: Expert Meeting on NTBs • September 2005, UNCTAD organized an Expert Meeting on NTBs with the following main objectives: • Identify ways to improve NTB data in TRAINS database • Clarify methodologies for definition and classification • Look at experiences of other organizations in dealing with NTBs

5. UNCTAD’s INITIATIVE : Expert Meeting on NTBs • The main conclusion of the meeting was: a clearer understanding of NTBs definition and classification as well as the availability of reliable and detailed data were prerequisites for reliable quantification, improved analysis and negotiation of better market access.

6. UNCTAD’s INITIATIVE :GNTB • Following the meeting, UNCTAD Secretary General established the Group of Eminent Persons on NTBs (GNTB). • Main purpose of GNTB is to discuss definition, classification, collection and quantification of NTBs so as to identify data requirements, and consequently to facilitate the understanding of the implications of NTMs.

7. UNCTAD’s INITIATIVE:GNTB members • Alan V. DeardorffProfessor of Economics and Public Policy, University of Michigan • Anne O. KruegerFormer First Deputy Managing Director, International Monetary Fund (IMF); present Professor of International Economics, Johns Hopkins School of Advanced International Studies • Amit MitraSecretary-General, Indian Federation of Chambers of Commerce and Industry • Marcelo de Paiva AbreuProfessor of Economics, Pontifical Catholic University of Rio de Janeiro • L. Alan WintersFormer Director, Development Research Group, World Bank; Chief Economist, Department of International Development (DFID), UK. • Rufus H. YerxaDeputy Director-General, World Trade Organization (WTO

8. UNCTAD’s INITIATIVE : MAST • To carry out the technical work of the GNTB, a Multi-Agency Support Team(MAST) was also set up. • Main objectives of MAST • Produce an updated classification of various NTBs • Advise on the feasibility of data collection of NTBs

9. UNCTAD’s INITIATIVE: MAST members • Food and Agriculture Organization (FAO) • International Monetary Fund (IMF • International Trade Centre (ITC) • Organization for Economic Cooperation and Development (OECD) • United Nations Conference on Trade and Development (UNCTAD) • United Nations Industrial Development Organization (UNIDO) • World Bank (WB) • World Trade Organization (WTO)

10. UNCTAD’s INITIATIVE:GNTB and MAST • UNCTAD Secretary General’s Group of Eminent Persons on NTBs (GNTB): met once in July 2006 • Multi-Agency Support Team for GNTB (MAST): 5 meetings from Oct. 06 to Jan. 09

11. MAST work: Definition of Non-Tariff Measures • Any measure that has an impact on trade, but is not a tariff, should be categorized as a non-tariff measure. • Not all measures affecting trade are implemented with discriminatory or protectionist purposes. • Assessing a priori whether a NTM has protectionist intent or has discriminatory effects can be quite difficult, if not impossible.

12. MAST work: Definition of Non-Tariff Measures • MAST agrees that NTBs are a subset of NTMs recognizing that the distinction of NTBs from NTMs should be avoided. • MAST proposes the following definition of NTMs “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”

13. MAST work: New Classification of Non-Tariff Measures • Drawing upon the existing, outdated classification of NTMs, modifications and new measures to reflect the current situation of NTMs in international trade were introduced. • Proposed new classification includes a substantial number of new sub-categories on SPS and TBT. • Introduction of new measures. • Classification suited to collect detailed information. • More than 200 measures at the most detailed level

14. New NTBs Classification Technical Measures A.Sanitary and Phytosanitary Measures (SPS) B. Technical Barriers to Trade (TBT) C. Pre-shipment inspection and other formalities D.Price control measures Import measures E. Licenses, quotas, prohibition & other quantity control m. F. Charges, taxes and other para-tariff measures Non- Technical Measures G.Finance measures H. Anti-competitive measures I. Trade-related investment measures J. Distribution restrictions K. Restrictions on post-sales services L. Subsidies(excluding export subsidies) M. Government procurement restrictions N. Intellectual property O. Rules of Origin Export Measures P. Export-related measures(including export subsidies)

15. MAST work: Procedural Obstacles • The new classification introduces the concept of “procedural obstacles”. • Procedural obstacles refer to issues related to the process of application of an NTM, rather than the measure itself. • “Testing requirement” a TBT measure as opposed to “Excessive documentation requirement”, a procedural obstacle. • These can only be collected through surveys.

16. MAST work: Collection of Non-Tariff Measures • There is no one single source of information. • One key issue is to identify all possible data sources. • Importance of using existing international databases (FAO, OECD, WTO, IMF etc..) • Collection from both importer (government) and exporters (complaints by traders).

17. MAST work: Data Collection Framework • Data framework was devised. • Official data will be collected from national official documents, international and regional organizations. • Private sector data will be collected through surveys and a web based platform. • Data will provide information on NTMs at the product level according to the HS classification.

18. NTBs Pilot Projet • In order to test the new classification and the data collection framework, a pilot project was conducted in 7 developing countries: • Brazil, Chile, India, Philippines, Thailand, Tunisia and Uganda. • Pilot project conducted by UNCTAD and ITC.

19. NTBs Pilot Projet Objectives of the pilot project: • Test and refine the new classification of NTMs. • Test and refine the approach utilized for official data collection. • Devise, test and refine the approach for private sector data collection. • Develop the information technology platform for the global collection and storage of NTMs data. • Quantify the resources and costs involved in collecting NTMs data. • Gather experience as to better recommend next steps for achieving broader NTMs data coverage.

20. NTBs Pilot Projet: Lessons Learnt • The classification was further refined based on comments received from consultants. • Definition of different measures was improved. • Need to improve data collector’s training. • Provide a data collector’s guide. • Use a shorter version of questionnaire to improve response rate and to minimize misclassification. • Face to face interviews are better to minimize communication problems.

21. NTBs Pilot Projet: Lessons Learnt • Identification of national sources for official data (ministries etc..) • Complexity of collecting official data varies across countries (existing sources, format of the documents etc..) • Some of the measures can only be collected through surveys (government procurement, subsidies, intellectual property rights, distribution restrictions and restriction on post sales services) as official data is very poor. • Data will have to be standardized because of different formats. • Collection of survey data is much lengthier than official data collection.

22. NTBs Pilot Projet: What’s next? • 4-5 November Meeting in Geneva to discuss the outcome of the project. • Will bring together all countries involved in the pilot project. • UNCTAD Secretary-General's Group of Eminent Persons on Non-Tariff Barriers (GNTB) will attend. • Hope to have the new classification adopted by the GNTB members.

23. NTBs Pilot Projet: What’s next? • MAST would like the New Classification to be the standard classification for the collection, analysis and dissemination of NTM information by all international, as well as regional organizations. • There should also be a recommendation for future work plan in which MAST would like to have closer collaboration with regional groupings. • MAST proposes to launch a multi-year programme to build, update and disseminate free of charge a NTMs database using the new classification and covering as many countries as possible.

24. Thank you! Samuel.munyaneza@unctad.org