NON TARIFFS MEASURES

 NON -TARIFF MEASURES (NTMS)

• From the discussion above, we have learnt that tariffs constitute the visible barriers to trade and have the effect of increasing the prices of imported merchandise. By contrast, the non- tariff measures which have come into greater prominence than the conventional tariff barriers, constitute the hidden or 'invisible' measures that interfere with free trade. 
• 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 (UNCTAD, 2010). 
• Non-tariff measures comprise all types of measures which alter the conditions of international trade, including policies and regulations that restrict trade and those that facilitate it. It should be kept in mind that NTMs are not the same as non-tariff barriers (NTBs). 
• Compared to non-tariff barriers which are simply discriminatory non-tariff measures imposed by governments to favour domestic over foreign suppliers, non- tariff measures encompass a broader set of measures.
• According to WTO agreements, the use of NTMs is allowed under certain circumstances. Examples of this include the Technical Barriers to Trade (TBT) Agreement and the Sanitary and Phytosanitary Measures (SPS) Agreement, both negotiated during the Uruguay Round. 
• However, NTMs are sometimes used as a means to circumvent free-trade rules and favour domestic industries at the expense of foreign competition.
•  In this case they are called non-tariff measures (NTMs). It is very difficult, and sometimes impossible, to distinguish legitimate NTMs from protectionist NTMs, especially as the same measure may be used for several reasons.

Depending on their scope and/or design NTMs are categorized as:

I. Technical Measures: Technical measures refer to product-specific properties such as characteristics of the product, technical specifications and production processes. These measures are intended for ensuring product quality, food safety, environmental protection, national security and protection of animal and plant health.

II. Non-technical Measures: Non-technical measures relate to trade requirements; for example; shipping requirements, custom formalities, trade rules, taxation policies, etc.

These are further distinguished as:

(a) Hard measures (e.g. Price and quantity control measures),

(b) Threat measures (e.g. Anti-dumping and safeguards) and

(c) Other measures such as trade-related finance and investment measures. 

Furthermore, the categorization also distinguishes between:
(i) Import-related measures which relate to measures imposed by the importing country, and

(ii) Export-related measures which relate to measures imposed by the exporting country itself.

(iii) In addition, to these, there are procedural obstacles (PO) which are practical problems in administration, transportation, delays in testing, certification etc that may make it difficult for businesses to adhere to a given regulation.