Six months after the Nairobi ministerial conference of the World Trade Organisation (WTO), the Least Developed Countries (LDCs) have again stressed the urgency of addressing the issue of Non-Tariff Barriers (NTBs). This is not a new demand from the LDCs to facilitate their exports, but during the post-Nairobi period, it is the first time that the poor countries of the world have raised their joint concern on NTBs along with some other critical issues.
During the last week of June, a meeting of the WTO's Sub-Committee on LDCs took place in Geneva where the LDC Group presented the list of 'post-Nairobi priorities' and the issue of NTBs was highlighted. On behalf of the LDCs, the group coordinator Benin submitted a Communication Paper which is divided into three sections: (1) Implementation of all decisions in favour of LDCs; (2) Remaining areas of the Doha agenda; and (3) New issues and paragraph 34 of the Nairobi ministerial declaration.
CONCERN ON NTBS: The issue of NTBs is included in the first two sections of LDC Communication Paper. Issue of the NTBs is always a major concern for the poor countries. In the communication paper, LDCs pointed out that NTBs are the most troubling barriers to the market access in key destinations for their exports. It said: "Notwithstanding the benefits of DFQF treatment for agricultural and non-agricultural products from LDCs, non-tariff barriers are increasingly becoming the most troubling barriers to market access in key destinations for LDC exports. LDCs also call for the examination of non-tariff barriers impacting LDC exports and to explore options to address adequately the problems faced by LDCs."
It is to be noted that NTBs are part of the Non-Tariff Measures (NTMs), but all NTMs are not NTBs. United Nations Conference on Trade and Development (UNCTAD) defined NTMs as '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.' On the other hand, any NTM may turn into NTB if applied to restrict trade intentionally and for protecting local industry unfairly. So, defining the NTB depends on application in most of the cases. Complex rules of origin, product specific quotas, import prohibition and licensing, frequent changes in standards are some of the common NTBs.
Many developed and developing countries maintain tough and complex product standards which the poor countries find it difficult to comply with. Again, some countries have limited or no transparent rules and regulations regarding international trade. So, for LDCs, duty-free and quota-free (DFQF) market access is yet to be fully meaningful.
LDC Communication Paper pointed out: "Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT), are also of concern to LDC exports. Work must be done in the post-Nairobi phase to address measures that restrict market access."
This is a tricky issue as these are two technical measures of NTMs, as classified by the UNCTAD. SPS measures are applied to protect human or animal life from risks arising from addictives, contamination, toxics or disease-causing organism in their food; to prevent or limit other damages to a country from the entry, establishment or spread of pests; and to protect bio-diversity. These include measures taken to protect the health of fish and wild fauna as well as of forests and wild flora. TBT measures are technical regulations and procedures for assessment of conformity with technical regulations and standards, excluding measures covered by the SPS agreement of the WTO. The WTO agreement on TBT imposes multilateral legal disciplines on two legal instruments: technical regulation and standards. A factual matter which could conceivably come under both TBT or SPS, should be treated under SPS.
Again, according to the UNCTAD estimation, around 75 per cent of LDCs exports face NTMs in their destination markets. TBT is widely used to regulate international trade in the manufacturing sector. SPS measures are typically applied to farm products and also cover other product that may have inherent health hazards due to contamination.
NTMs are not a LDC or developed country issue and it involves all trading partners. A classic example of non-tariff barriers is the bilateral trade between Bangladesh and India. Despite providing zero tariff for Bangladeshi products, India imposes a series of NTBs. This makes the entry of Bangladeshi items difficult and consequently, Bangladesh cannot tap the benefit of zero tariff benefits in a desired manner. India argues that most of the NTBs are compliant with the WTO regulations and so should be considered as valid NTMs. Thus, the problem lies on identification of the NTBs.
In fact, NTBs as well as NTMs in South Asia are most troublesome issue. That's why, the SAARC Trade Promotion Network (TPN) has taken an initiative for all the leading trade bodies of the SAARC countries to set up NTM desks. Moreover, formation of policy advocacy groups for dealing with NTMs in the member countries has also been recommended. Bangladesh has already formed the group. All the LDCs may add these initiatives in their tools to deal with the NTMs, to be precise NTBs, in a better way.
EFFECTIVE AID FOR TRADE: LDCs urge all WTO member countries to make the aid-for-trade (A4T) really useful. Stressing the importance of dealing with the NTMs, the LDC paper said: "Building on the progress to date, the LDCs have identified as a priority the need to address supply-side capacity constraints, and constraints to conform with standards imposed by trading partners, to the extent that they present real challenges for LDC exports. Conformity with technical standards and regulations defined by trading partners should be supported by appropriate technical assistance, capacity building programmes with predictable resources." The resources should be channelled under the aid for trade programme.
Launched in the Hong Kong Ministerial conference of the WTO in 2005, the aid-for-trade initiative is yet to bring some of the expected outcome. A total of US$246.5 billion has been disbursed for financing aid-for-trade programmes and projects between 2006 and 2013. In 2013, global commitment for aid for trade stood at $55.37 billion while the disbursed amount stood at $41.6 billion. Of the amount, LDCs received around 26.5 per cent or $11 billion which is quite low compared to their requirements. Moreover, in many cases, committed or disbursed aid for other purposes was diverted and packaged as aid for trade. There are four subsets of aid for trade. These are: trade policy & regulations, economic infrastructure, building productive capacity and trade-related adjustment. These create a grey zone in the whole process.
That's why, LDC Communication Paper stressed on resource allocation 'to support LDC diversification and competitiveness in the supply of value-added products.' LDCs also demanded support for structural transformation of their businesses to promote diversification and industrialisation.
LDCs expressed their disappointment on slow progress of the second phase of the Enhanced Integrated Framework (EIF), the dedicated window of the WTO to cater to LDCs' requirement on aid-for-trade. Appreciating those who committed donations in Nairobi, LDCs urged 'other donors who have not yet made a contribution' to make their commitments without delay.
Finally, LDCs are in a process of finalising the Terms of Reference for a clinical examination of DFQF market access regime, to be undertaken by the WTO Secretariat. It is a right decision as knowing the real status and impact of DFQF is critical now. The incomplete implementation of WTO ministerial decisions in this regard is disappointing. Thus, the LDC paper said: "The LDC Group urges all WTO members to engage on issues that advance the implementation of Hong Kong Declaration, Annex F, and the Bali Decision on Duty-Free Quota Free Market Access."
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