Financial Daily from THE HINDU group of publications
Friday, Apr 23, 2004
Industry & Economy
NTBs a major tool to bar market access
New Delhi , April 22
MIDDLE and low-income developing countries and the least developed countries now confront market access barriers, which become substantially "stiffer with products with lower value added and technological content, particularly agricultural products, textiles, clothing, footwear and leather products."
This was the main conclusion of the latest and updated version of the non-tariff barriers (NTBs) study of the Commerce Ministry, which had been circulated to India's Commercial Representatives Abroad, diplomatic sources told Business Line here.
The study said tariff intervention was the principal mode of protectionism till the inception of the 1970s. But with falling tariff levels (both WTO bound and applied tariffs), non-tariff barriers have become a major barrier to market access to exports of interest to developing countries.
The study was conducted and updated under the overall supervision of the Economic Advisor, Ministry of Commerce, Dr H.A.C. Prasad, sources noted.
While direct NTBs are explicitly designed and implemented for purposes of restrictive trade and cover measures such as quantitative restrictions, tariff quota, voluntary export restraints, orderly marketing agreement, export subsidy, export credit subsidy, Government procurement and import licensing, indirect NTBs are domestically implemented to meet some other policy target but impacting on trade flows in the process.
The latter include measures such as health and safety regulations, technical standards, environment controls, customs valuation procedures, rules of origin, labour laws and even anti-dumping duties, countervailing duties, regional subsidisation and subsidisation of public enterprise.
The study said while some of the NTBs were genuine and others only to restrict imports, the WTO Secretariat has circulated a list of NTBs which include among others, Government participation in trade and restrictive practices tolerated by governments, customs and administrative entry procedures, technical barriers to trade and charges on imports.
According to the latest study, the major NTBs faced by exporters in different principal markets of India is based on facts furnished by exporters, trade bodies and internal research by the Economic Division, Commerce Ministry here.
Thus in the US, the major NTBs plaguing Indian exporters include rule imposed by US Customs, Buy American provisions to promote US-made iron foundry products, refusal of import consignments by the US Food and Drug Administration on simple reasons, registration, documentation and customs procedures, levies and charges, standards and other rigorous technical parameters.
In the European Union, which is composed of 15 countries and soon to become 25 with the addition of 10 on May 1, NTBs cover lack of harmonisation and common standards, labelling rules and regulations, NTBs related to sanitary and phytosanitary (SPS) conditions, pesticides residues, subsidies, health and hygiene conditions, testing and certification requirements for electric vehicles.
In Japan, the NTBs include authorisation requirement in the import of goods, large-scale retail store law, import quotas in respect of squid, seaweed, mackerel, sardine, herring and scallop, impractical and strict quarantine procedure and Japanese standards affecting food additives.
In Australia, they encompass prohibition of imports of milk-based items, SPS standards, non-refund of value-added tax, health inspection in the case of items shipped and import restrictions.
In West Asia and North Africa (WANA), the NTBs cover strict packaging and labelling requirements, regional trading arrangements and government monopoly.
In Bangladesh, they cover restrictions on bids for equipment to power sector, unnecessary delay at Bangladesh border (Benapole), delays related to issue of certificates and classification problems. In the case of Brazil, the NTBs include anti-dumping duty on entry of jute bags, fixation of minimum price to prevent under-invoicing, marking of "En-Metro" on tyres, requirement for Bio-Availability and Bio-Equivalence (BABE) studies, extensive labelling and marketing requirements and charges for clearance at port and the merchant marine renewal tax.
In Tanzania, imposing of suspended duty and disallowing entry of jute bags weighing less than 1.7 kg remain the NTBs, while in Singapore, these include introduction of Singapore Consumer Protection (Safety Requirements) Regulations 2002 and Conformity Assessment Certificate for registration of hardware and related items.
Sri Lanka's NTB includes import restriction on essential/sensitive items, while China, a new entrant to WTO, has NTBs relating to restriction on imports, standardisation regulations, registration requirements, commodity inspection, quarantine rules and tax related barriers like VAT.
In Central Europe and Baltic Countries, the NTBs include stringent health rules for spices and microbiological count, mold count to be free from salmonella and e-coli bacteria, while in Venezuela, these include heavy fines to the importer and the forfeiture of the goods in case of under-invoicing of goods.
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