Activating NTM desks in S Asia for more trade

The problems of non-tariff barriers (NTBs) and non-tariff measures (NTMs) in trading within South Asia are not new. Thus the effort to address the problems needs to be a continuous process as a part of smooth trade facilitation across the region. But identifying NTBs and NTMs is always a challenging task due to complexity of their nature. Without rightly identifying any NTB or NTM, it is not possible to take appropriate remedial steps.
Against such a backdrop, the SAARC Trade Promotion Network (TPN) has come up with an initiative to establish a 'NTM Desk' in leading trade bodies of all the SAARC countries two years ago. The initiative has followed a recommendation of a study titled 'NTMs in South Asia: Assessment and Analysis' carried out by three trade experts of Bangladesh with the support of Dhaka-based Metropolitan Chamber of Commerce and Industry (MCCI).
The SAARC TPN is a regional platform consisting of 28 public and private institutions from the eight member-countries of the regional bloc. While public sector members are national commerce or trade ministers or departments or promotion agencies, private sector members are leading trade bodies of the member-states. So, the platform is a kind of private-public partnership.
The core idea of NTM desks is to set a mechanism for regular monitoring and reporting non-tariff measures being faced by respective countries in regional trade and to exchange information among them. Through this process, all the desks across the eight countries would be able to identify NTMs and also recommend ways to remove those. As trade bodies have a lot of functions, a dedicated desk for NTMs is more helpful for reducing or removing the problem.
On a pilot basis, three NTM desks were established in Bangladesh, Pakistan and Nepal. In Bangladesh, the MCCI set up the desk in early 2014. In December 2013, similar desks were established in the Federation of Pakistan Chamber of Commerce and Industry and later in the Confederation of Nepalese Industries (CNI). Following the pilot initiative, all the member-countries have established such desks in their leading trade bodies. In Bangladesh, besides the MCCI, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has also established a NTM desk.
NTBS AND NTMS: There is a difference between NTBs and NTMs although it is not always easy to differentiate between the two. One NTM may be a NTB for a particular country, but not for the other although NTBs are recognised as a sub-set of NTMs. The SAARC member-countries are also divided in many cases over identification of NTMs.   
The United Nations Conference on Trade and Development (UNCTAD) has set a definition of NTMs which has now been accepted by the International Trade Centre (ITC) and other international bodies. The definition identifies all the policy measures except customs tariffs as NTMs if those have adverse effects on international trade. The World Trade Organisation (WTO) has allowed the use of NTMs under certain circumstances. For instance, Technical Barriers to Trade (TBT) and Sanitary and Phyto-Sanitary Measures (SPS) are two recognised NTMs permissible under certain conditions.
For example, the Indian Plant Quarantine Order, 2003 (revised, 2011) regulates plant and plant products in India. Through this Order, the Indian authority wants to ensure that products imported for human consumption are free from pests and diseases and not harmful for India's food security. Thus, implementation of regulations has forced the exporters to maintain strict standards. These standards have posed barriers for some exporting countries. African exporters have already alleged that they are facing huge difficulties on getting their  certificates after complying with Indian requirements.  Thus, their exports to India have faced obstacles. But, it is also very difficult to term Indian strict regulation as a trade barrier as no sensible country will allow low quality and infected food or plant items.
According to the ITC, NTMs are sometimes used 'as a means to circumvent free trade rules and favour domestic industries at the expense of foreign competition.' In such a case, they are known as NTBs. The ITC, however, acknowledges that 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."
In case of export of food or beverage items to India, there are some lab testing and packaging requirements needed to be complied with. For example, dates of manufacturing and expiry have to be clearly mentioned on packets. This is an essential requirement for any kind of consumable item. But requirement of labelling the information on top or backside of packages some time appears as a NTB.
A Bangladeshi beverage company has faced such type of NTB. Indian customs officials in land custom stations some time blocked consignments of beverage on the plea that manufacturing and expiry dates were not  tagged in the upper portion of the packages. Again, they some time asked for tagging such dates on lower or back portion of the packages. Such a change in labelling requirement is clearly a NTB.  Again, there is a requirement that imported jute hessian bags, generally used for transporting items like sugar and fertilisers, need to be labelled with the words 'Made in (name of the country)' in significantly large fonts. As Bangladesh is the only country exporting these bags to India, it has to comply with this requirement. It is a NTM, not a NTB.
NEW WING OF COOPERATION:  Despite slow implementation of SAFTA (South Asia Free Trade Area) agreement, countries of the South Asia have to gradually eliminate their customs tariffs for other regional trading partners. Already India has allowed tariff-free market access to all the Least Developed Countries (LDCs) of the SAARC including Bangladesh. Elimination of tariff wall will definitely drive the countries to adopt NTMs for a certain period of time in the name of protecting local industries and restricting low-quality imports from other countries.   
The Consumer Unity and Trusts Society (CUTS), a Jaipur-based international research organisation, in a study three years back said, "NTMs including customs procedures and other procedural non-tariff measures account for more than 80 per cent of cost of doing trade. In South Asia, if non-tariff measures affecting the cost of doing trade are addressed properly, then gains to consumers from an enhanced intra-regional trade regime would be much than static gains. Further gains can be achieved from gradual liberalisation of intraregional trade in services and investment."
In this connection, NTM desks in SAARC countries need to work hard to clearly identify NTMs and NTBs. Exchange of information will also be helpful to narrow the differences over defining of NTMs and NTBs among the member-countries. Ultimately, it will help enhance regional trade which is still low compared to other regional trade blocks.  Intra-regional trade ratio in SAARC has actually declined to 4.63 per cent in 2013 from 5.84 per cent in 2005. At the same time, intra-regional trade ratio in BIMSTEC is almost static at 5.3 per cent during the period under review.   
The CUTS also mentioned 'a minimum consumer welfare gain of approximately US$2 billion a year by way of savings on aggregate consumer expenditure on imported products in selected categories.' The number is not small at all when intra-regional trade stood at $44.93 billion in 2013.  
Thus, a small step like NTM desk can be a new wing of cooperation among the SAARC countries. Addressing NTBs and NTMs will reduce cost of trade across the region. Ultimately, consumers will be benefited.
[email protected]