The past few years have seen a proliferation of a variety of non-tariff barriers (NTBs) in developed countries. In particular, food and environmental safety standards are increasingly threatening a substantial proportion of developing country exports.
The WTO agreements on sanitary and phytosanitary measures (SPS), as well as technical barriers to trade (TBT), aim to ensure that such standards and regulations are not used for protectionist purposes or cause adverse impacts on trade. However, the flexibility in these agreements for WTO Members to impose their own regulations has been exploited by developed countries.
Very minute risk assessments are often used to impose high health or environmental standards. For instance, the adoption of a new aflatoxin standard in the European Union would reduce the health risk to approximately 1.4 deaths per billion a year while there are not a billion people in the whole of the EU.
Another problem is the wide variation in the standards adopted by importing countries, which follow different norms on aflatoxins and pesticide residues, thus increasing the compliance cost of exporting countries. Many of the environment- related standards are imposed in a less than transparent manner and are sometimes accompanied by other requirements, such as ‘good manufacturing practice’.
It is clear that the cost of compliance is substantial and often beyond the means of many enterprises, particularly the smaller ones. Although the SPS and TBT agreements have provisions for technical assistance provided by developed countries for compliance, in practice such assistance has not been made available in a timely manner. Developing countries, including India, have therefore proposed mandatory provisions for technical assistance.
Source: Research and Information System for Developing Countries: World Trade and Development Report 2007.