News

Countries lose USD 23 billion due to non-tariff barriers

20 de julho de 2016

São Paulo – The United Nations Conference on Trade and Development (Unctad) released data last Tuesday (19) on the impact of non-tariff barriers on global trade. The numbers show that rules enforced by G20 countries, such as sanitary and phytosanitary measures, lead to developing countries losing USD 23 billion worth of exports to the bloc, or 10% of their total sales to G20 members – the world’s biggest economies. The proliferation of these rules is on the agenda of the 14th session of the Unctad taking place this week in Nairobi, Kenya.

“These kinds of measures are becoming increasingly widespread,” a press release quoted Unctad deputy secretary-general Joakim Reiter as saying. “For example, measures on the cleanliness and pathogen-free status of food – known as sanitary and phytosanitary measures – cover more than 60 per cent of agricultural trade,” he remarked.

Unctad stresses that these norms are “legitimate and important” to protect the health of citizens and the environment, but notes that as tariffs have fallen to historic lows, non-tariff measures have replaced them as a key brake on faster global trade growth, and this is expected to increase even further.

“Such regulatory measures disproportionately increase trade costs for small and medium-sized enterprises and developing countries, particularly the least developed. We estimate, for example, that the impact of the European Union’s sanitary and phytosanitary measures comes to a loss of about USD 3 billion for low-income country exports. That’s equal to 14 per cent of their agricultural trade with the European Union,” Reiter said.

He added that no one expects the G20 countries to get rid of their non-tariff barriers, but said the issue needs to be managed better. The deputy secretary-general said better information would reduce the costs of these measures. “It’s all about transparency and harmonizing regulations,” he said.

Although Unctad doesn’t state it openly, several countries are known to use non-tariff barriers as a covert form of protectionism, thereby creating obstacles to the entry of foreign competitors into their domestic markets.

Also on Tuesday, Unctad launched a database of the non-tariff measures of 56 different countries, covering 80% of world trade. It believes the database will help all concerned parties to quickly find out what are the non-tariff requirements for a given product in a given country.

“This database will improve countries’ ability to understand the regulatory requirements, helping them to comply more easily and at less cost,” said the Director of Unctad’s division on international trade in goods and services, and commodities, Guillermo Valles.

The organization notes that non-tariff barriers have fixed costs and that they affect mostly low-income countries, because their businesses are smaller, and therefore these costs become disproportionately higher. “Use non-tariff measures to protect your citizens, but don’t let them compromise trade because that will block economic growth and job creation,” said the chief ad interim of Unctad’s trade analysis branch, Ralf Peters.

*Translated by Gabriel Pomerancblum