Trade Policy at Work

Non-Tariff Barriers and their Effect on East African Exports

East African delegates to the WTO discussed an analytical note prepared at their request to exmine existing non-tariff barriers (NTBs) and their effect on EAC exports. Non-Tariff Barriers (NTBs) and Non-Tariff Measures (NTMs) are both governmental measures that regulate trade in goods and services.

Non-Tariff Barriers: Coffee and Cut Flowers

The authors of the study, Francoise Guei and Famke Schaap, gave a presentation on their research and responded to questions by Delegates of EAC countries. The objective of the analytical note and presentation was to analyse the implication of NTBs on EAC exporters. They particularly examined the exports of coffee and cut flowers (horticulture), before looking at opportunities for the EAC in current WTO negotiations.

While all NTBs are also considered NTMs, not all NTMs may be NTBs. NTM is a neutral, agreed definition, while NTB is a subjective definition, based on the perception of exporters. NTBs are unnecessary obstacles to trade. They are classified as: (i) Technical measures on imports, the most burdensome NTBs; (ii) Non-technical measures on imports, the largest body of measures; (iii) Measures on exports; (iv) Procedural obstacles and inefficiencies to trade, referring to the process of trade posing as an obstacle; and (v) ‘Niche market requirements’. It is important to distinguish between governmental and non-governmental barriers.

The WTO currently has policies covering some NTBs, being SPS and TBT measures. These policies address the role of transparency with notifications and trade policy reviews (TPRs). Coverage of NTBs by the Doha Development Agenda has been limited to NAMA, tackling horizontal mechanisms and vertical proposals, as well as TBT-transparency, international standards, and conformity assessment.

Recommendations to Negotiators

A number of recommendations for EAC exports and trade negotiators were presented. It was acknowledged that NTBs are the main challenge in target markets, and the WTO still remains the most relevant platform to address them. The main NTBs in the case studies presented were technical measures, however standards are increasingly becoming an obstacle as well, hence the call for the following:

  • Exporters will need information through a consistent channel on NTBs/NTMs in place.
  • The EAC region should invest in support to organizations that research, inform, and play an advocacy role.
  • It should use existing coordination mechanisms in the EAC to address trade concerns and formulate inputs in trade negotiations.
  • Technical assistance is needed for sector-specific assessments in order to address TSI’s role in NTBs.
  • PTAs are beginning to address consumer preferences in target markets, and developed countries are trying to implement WTO plus measures to take care of consumer preferences through the government.
  • Agriculture is also affected by NTMs, related to SPS and TBT, and the EAC should act collectively to analyse their concerns.
  • They should look at standards horizontally, governments looking to place their voice in WTO committees.
  • The EAC needs to identify priority issues to broaden WTO negotiations and create collective positions.

Open Discussion

In the ensuing discussion the following issues were raised:

  • It was acknowledged that the request for a study was in anticipation of NTB negotiations in Nairobi for the 10th WTO Ministerial Conference, although the issue is no longer on the table.
  • The major problem identified was restrictions imposed by wealthier countries that affect EAC exports.
  • It was also noted that a quantification of losses due to NTBs would be helpful in order to know the extent of intervention required.
  • It was observed that there needs to be a strengthening of capacity at the national level in order to be able to overcome the issue of NTBs.
  • The main conclusion that can be drawn from quantifications is that the highest costs were in SPS and TBT mechanisms, due in a large part to lack of infrastructure.
  • EAC countries will need to negotiate this issue; perhaps a plausible alternative could be WTO monitoring of private standards, which is key and costly.

The conversation concluded with the acknowledgement that NTBs will have to be dealt with after the 10th Ministerial Conference in Nairobi, since it is not amongst the current issues under consideration.