Non-tariff barriers (NTBs) are trade barriers that restrict imports or exports of goods or services through mechanisms other than the simple imposition of tariffs. NTBs can take a wide variety of forms, such as quotas, embargoes, export restraints, additional taxes, special licensing requirements and administrative policies. The effects of NTBs can be just as damaging to free trade as tariffs, and even more difficult to eliminate.
Despite the substantial reduction in tariffs in the last two decades, NTBs have become increasingly important for many goods, services and investments. NTBs give governments or corporate interests the ability to limit imports or exports without formally violating the provisions of international trade agrements. This has often been done to protect domestic industries from international competition or to counter perceived protectionism from other countries.
NTBs can be very difficult to identify and measure because they are often hidden and complex. They can also be difficult to negotiate because of intricate and long-standing political and economic relationships. NTBs often involve the collaboration of governmental and corporate interests, making it difficult for an individual country to unilaterally remove them.
For example, import quotas can be diffcult to increase or eliminate because they involve negotiations among multiple countries. Others, such as technical and regulatory barriers, are difficult to understand and modify because they require extensive technical expertise. The political pressures associated with NTBs can change quickly, meaning there is no guarantee that countries will abide by the terms of a negotiated NTB agreement.
Despite the complexity of NTBs and the challenges of negotiation, there are a variety of strategies developed by governments and international organizations to reduce the negative impacts of such policies. These strategies often involve the establishment of regional or global standards and regulations to ensure that NTBs are not applied arbitrarily or used to unfairly restrict trade.
For example, the WTO Agreement on Technical Barriers to Trade, signed in 1994, provides for a dispute settlement mechanism to help resolve technical disputes. Similarly, the WTO Agreement on Sanitary and Phytosanitary Measures, signed in 1995, seeks to reduce obstacles to trade caused by non-tariff measures related to food safety and animal and plant life or health.
In addition, the OECD established the Working Party on Export Credits and Credit Guarantees to reduce the trade-distorting effects of export credit subsidies. These agreements are just a few of the measures that have been used to address the potentially damaging effects of NTBs.
Although NTBs can limit trade and harm economic efficiency, it is important to remember that NTBs can also be used for legitimate policy objectives. For example, taxes and restrictions on the trade of certain goods can be used to protect the environment or labor standards. NTBs can also be used to stimulate economic activity or provide incentives for research and innovation.
In conclusion, NTBs are an important consideration for policy makers and are becoming increasingly important due to the growing demand for goods and services. There is no easy solution to the problem, as NTBs can be difficult to identify and challenge. However, international agreements and organizations, such as the WTO and OECD, are working hard to develop standards and regulations to reduce the negative impact of non-tariff barriers and promote free and fair trade.
