Non-Tariff Measures & Technical Regulations: The Challenges of Compliance for Exporters: A Three-Year ITC Survey across 30 Countries Is Seeking to Identify and Understand the Major Obstacles to Trade Faced by Export Businesses in Meeting Non-Tariff Measures (NTMs) and Technical Regulations
Averbeck, Carolin, Skorobogatova, Olga, International Trade Forum
Exporters and trade policy-makers in developing countries are increasingly concerned about NTMs applied by destination markets. These include a wide range of trade measures that are related to export, including technical regulations and other mandatory standards. They may vary across products and countries, and can change frequently. While many NTMs are applied for legitimate reasons, others can be barriers to trade.
Many exporters in developing countries lack the information, capabilities and facilities to meet these complex requirements. In addition, compliance with NTMs can reduce export competitiveness by adding extra time and cost to the production of goods. At the same time, many national policy-makers lack a clear picture of the impediments to trade that the business sector faces when complying with these measures.
In order to better identify and understand the impact of NTMs and other obstacles to trade on businesses, ITC is currently implementing representative company surveys in 10 developing countries.
Initial findings of the ongoing survey indicate that the impact of NTMs on exporters varies according to the country. For example, in Burkina Faso 70% of interviewed companies reported that NTMs strongly affect their daily operations, compared to only 24% in Hong Kong (China).
From the perspective of individual companies, the survey has also demonstrated that NTMs can be experienced as barriers to trade for a number of reasons, such as the company may not be aware of the requirement; the regulation may be so strict that a company may not be able to comply with the requirement without significant changes to production processes; or the cost to demonstrate compliance may be prohibitive to the company. For example, a company required to test products in a specific laboratory located in a third-party country or obliged to obtain and translate a certain health certificate from a local institution faces time-consuming and often costly compliance procedures. These 'procedural obstacles' include a wide range of constraints ranging from administrative burdens and time delays to the lack of legal protection and attitude of officials in the home country, export destination and transit countries. According to preliminary results from the survey in Burkina Faso, more than 50% of the 74 companies interviewed experienced trade barriers linked to domestic challenges. Similar preliminary results were found among other surveyed countries. Other obstacles not directly linked to NTMs related to transportation, the business environment and security.
Results from a 2008-2009 pilot survey, jointly executed by UNCTAD and ITC, demonstrated that technical measures--including both sanitary and phytosanitary measures and technical barriers to trade--are a major concern for exporters. The survey found that 72% of all companies questioned in six developing countries reported concerns about technical measures. Many of the concerns related to mandatory quality standards about product characteristics or associated production processes. The most burdensome requirements for exporters were the compliance with certification requirements (20%); labelling, marking and packaging requirements (12%); traceability requirements (9%); and tolerance limits for residues and contaminants or res-tricted use of certain substances (8%). …