Bridges Weekly Trade News Digest • Volume 13 • Number 39 • 11th November 2009

Industrial Goods Talks Examine Non-Tariff Barriers

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Volume 13 Number 39 PDF • 0.23 MB

Although these policies are often intended to promote legitimate objectives like consumer protection, they can be more trade-restricting than strictly necessary. The way governments introduce new measures can also make life difficult for would-be exporters. Existing WTO agreements - on sanitary and phytosanitary measures, technical barriers to trade, and import licensing procedures, to name a few - set out some rules for such regulations, to ensure that they do not become a vehicle for disguised protectionism. And the mandate for the negotiations on non-agricultural market access (NAMA) in the Doha Round trade talks calls for the reduction of ‘non-tariff barriers’ (NTBs, in negotiators’ parlance), particularly on products of export interest to developing countries.

For much of the NAMA negotiations, NTBs have taken a low profile, with centre stage occupied by deep divisions on the parameters determining tariff cuts by developed and developing countries, and the extent to which the latter would be able to shield some products from liberalisation.

But with little movement in the past year on what is now the main difference in the NAMA talks - whether large developing markets like China, Brazil, and India choose to participate in voluntary initiatives to cut deeply or even eliminate tariffs across entire industrial sectors - officials have been turning their attention to NTBs.

The bulk of discussions during a week of NAMA talks from 2-6 November focused on some of the proposals for how to deal with problems arising from NTBs. Officials met in a range of formats, from bilateral and in groups to the multilateral plenary.

One of the newer submissions discussed was a paper from India and the EU that outlined a framework for addressing industry-specific NTB proposals. The document remains classified, but sources told Bridges that it works from the premise that many NTB proposals are similar, whether they deal with toys, automobiles, or electronics. For example, several proposals call for members, when adopting a new regulation for a product, to consider the costs of compliance to would-be exporters, discuss prospective regulations with trading partners, and respect international standards when possible. The EU-India proposal suggests that rules for transparency regarding different non-tariff measures could be identical for different sectors, and accompanied by sector-specific disciplines.

Cuba, which has been the target of a US trade embargo for 50 years, reiterated its call for the elimination of ‘unilateral economic or trade measures’, arguing that they constitute a non-tariff barrier that violates the spirit of the WTO agreements. According to its proposal (TN/MA/W/94/Rev.2), a country’s ability to invoke national security exceptions to justify trade barriers that might otherwise be WTO-inconsistent should be made contingent on “agreement at the international level about the situation” concerned. The US embargo on Cuba lacks such agreement: in a non-binding vote at the United Nations last month, governments condemned it by a 187-to-3 margin (with two abstentions), as they have in previous years. Sources report that while countries including Argentina and Brazil now support Cuba’s initiative, the US insisted that “it does not believe that this proposal can gain consensus.”

Another proposal, this one from Japan, Switzerland, and the US, urged liberalising trade in ‘remanufactured goods’ (TN/MA/W/18/Add.16/Rev.3). Pointing to the raw materials saved when goods are refurbished and used again, the proposal called for countries to review their non-tariff measures so that re-manufactured goods are subject to the same rules as new ones. During the recent meeting, Cuba, Indonesia, and India expressed reservations about the proposal. One concern is the proposal’s lack of a clear definition for exactly what constitutes a re-manufactured good. Some manufacturers from developing countries fear that opening up trade in re-manufactured products would expose them to a wave of cut-rate, second-hand goods from the industrialised world.

Two papers from the EU - one that sets out potential rules for standards, technical regulations, and conformity assessment procedures for the automotive sector (TN/MA/W/118), and another that does the same for electronics (TN/MA/W/119) - were criticised by both developed and developing countries as complicated and overly prescriptive.

Both proposals said that unnecessary duplication in national standards raised costs for industry. Both called for regulations to converge with relevant international standards and for members to adopt common conformity assessment procedures. And both said that transparency procedures - such as consulting with interested parties before introducing new regulations that differ from global benchmarks - should be required, and that regulations should be made public in a clear format.

The auto proposal provided for mutual recognition of domestic technical regulations. The electronics proposal, which was co-sponsored with Switzerland, stipulated that countries should not “prevent or unduly delay” the entry to market of products incorporating new technologies unless they could scientifically demonstrate safety or other risks.

The US has tabled proposals on the same two topics (TN/MA/W/120 and TN/MA/W/105/Rev.2). While similar to the EU proposals in terms of international standards and conformity assessment procedures, the US papers set out more detailed transparency requirements. For instance, countries proposing to adopt new technical regulations or conformity assessment procedures must give interested parties a minimum time period - “which normally shall not be less than 60 days” - to comment in writing on the potential measures, and take any comments into account.

A proposal that seems to have more widespread acceptance is one concerning labelling requirements for textiles, clothing, and footwear (TN/MA/W/93/Rev.1), sponsored by the EU, the US, Mauritius, and Sri Lanka. In addition to rules about consulting with trading partners about regulation, the proposal would forbid countries to have rules prohibiting labels in non-official languages, or for including information beyond the minimum required by domestic regulations.

At the end of the week, the chair of the NAMA negotiating group, Swiss Ambassador Luzius Wasescha, said that while the overall Doha negotiations might be 80 percent done - an assessment made by WTO Director-General Pascal Lamy - the talks on NTBs were further behind. He said that he would continue consulting with members, including senior officials, in the last week of November.

Another week of NAMA talks is likely to be held in December.

ICTSD reporting; “US Embargo on Cuba Again Finds Scant Support at UN,” NEW YORK TIMES, 28 October 2009.