NTM Survey Classification
Given the varying nature and complexity of NTMs, it is necessary to have a global NTM classification system which can catalogue different types of trade regulations. For the purpose of surveys on NTMs a classification system on NTMs is necessary to:
- Better identify and distinguish among various forms of NTMs
- Properly document the regulations that companies perceive as burdensome
- Enable the comparison of NTMs across different countries and companies of different types (sector, size etc)
ITC uses a NTM Survey classification based on an international classification developed by the Multi-Agency Support Team, incorporating minor adaptations to the ITC business survey approach.
This classification comprises technical measures, such as sanitary or environmental protection measures, as well as others traditionally used as instruments of commercial policy, e.g. quotas, price control, exports restrictions, or contingent trade protective measures, and also other behind-the-border measures, such as competition, trade-related investment measures, government procurement or distribution restrictions.
This classification does not judge on legitimacy, adequacy, necessity or discrimination of any form of policy intervention used in international trade. It acknowledges existence and is designed to organize information in a database format. Transparent, reliable and comparable information can contribute to an understanding of the phenomenon and help exporters worldwide to access information, as it happens with tariffs. Transparent information is also needed for any negotiations that could lead to harmonization and mutual recognition and thus enhance trade.
The classification system
The NTM classification for surveys differentiates measures according to 16 chapters (denoted by alphabetical letters, see figure below), each comprising sub-chapters (denoted by two letters) and the individual measures (denoted by two letters and a number).
The measures are first categorized according to which country applies the measure: exporting country or the importing country. All measures applied by the country importing goods are categorized under Chapter A – O, jointly referred to as ‘import-related measures’. Regulations applied by country on its own exports are under Chapter P and is referred to as ‘export-related measures’.
Under each of the two above categories one can distinguish between technical measures and non-technical measures.
Technical measures (Chapters A and B) refer to product-specific properties such as characteristics, technical specifications and production process of a product. It also includes conformity assessment methods, which affirm the compliance of a product to a given requirement. These technical regulations are generally aimed at ensuring quality and food safety, environmental protection and national security, and at protecting animal and plant health.
Non-technical measures (Chapters C to O) do not refer to product-specific properties but to trade requirements, such as shipping requirements, custom formalities, trade rules, taxation policies, etc.
To provide a richer picture of the problems companies face, the survey looks at procedural obstacles (POs) and the trade-related business environment (TBE). POs refer to practical challenges directly related to the implementation of NTMs. For instance, problems caused by the lack of adequate testing facilities to comply with technical measures or excessive paperwork in the administration of licences. Inefficiencies in the TBE may have similar effects, but occur unrelated to specific NTMs. Examples include delays and costs due to poor infrastructure or inconsistent behaviour of officials at customs or ports.
The NTM survey classification also includes a catalogue of procedural obstacles.
Importing countries are very idiosyncratic in the ways they apply non-tariff measures NTMs. This called for an international taxonomy of NTMs, which was prepared by the Multi-Agency Support Team (MAST), a group of technical experts from eight international organizations, including the Food and Agricultural Organization of the United Nations, the International Monetary Fund, ITC, OECD, UNCTAD, UNIDO, the World Bank and WTO. It was finalized in November 2009 and updated in 2012. It is used to collect, classify, analyse and disseminate information on NTMs received from official sources such as government regulations. For the purpose of the large-scale company surveys on NTMs, ITC uses a simplified version of this international classification.
The MAST NTM classification is available here.