Non-tariff measures (NTMs) can be defined 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'. These consist of mandatory requirements, rules, or regulations that are legally set by the government of the exporting, importing, or transit country.
NTM is a neutral concept and does not necessarily imply a particular direction of impact. It is not synonymous with the frequently used term, non-tariff barrier (NTB). NTB implies a negative impact on trade. The Multi-Agency Support Team (MAST) and the Group of Eminent Persons on Non-Tariff Barriers (GNTB) propose that NTBs are a subset of NTMs that have a 'protectionist or discriminatory intent'.
There is no single, specific type of NTM. Rather, they form a constellation of different types of regulations that accompany products throughout their life cycles, from creation through distribution and on to final consumption. Technical barriers to trade (TBT), sanitary and phytosanitary (SPS) measures, certification or testing requirements, quotas, import or export licenses, additional taxes and surcharges, financial measures, rules of origin, and many others, are all examples of NTMs.
The growing role of non-tariff measures in trade
Over several decades, trade liberalization has emerged as a key development tool based on evidence that benefits accrue to countries actively engaged in world trade. Developing, least developed and emerging economies have begun to realize gains through actively participating in the multilateral trading system. Concessions through a series of multilateral, regional and bilateral trade instruments, North-South and South-South, as well as nonreciprocal concessions, have led to extraordinary reductions in the use of average global tariffs for protectionist interests. With favourable market access conditions, international trade has soared to previously unseen levels, raising overall welfare and standards of living.
However, the positive effects of lower tariffs have been overshadowed by a shift towards misuse of NTMs. The sound use of NTMs to ensure consumer health, protect the environment and safeguard national security is legitimate. However, evidence suggests that countries are resorting to NTMs as alternative mechanisms to protect domestic industries. NTMs have been negotiated within the General Agreement on Tariffs and Trade and at the World Trade Organization (WTO) since the Tokyo Round (1973–1979) and are increasingly dealt with in regional and bilateral trade agreements. NTMs have gained importance, with many practitioners considering they have surpassed tariffs in their trade-impeding effect.
Being 'defined by what they are not', NTMs comprise a myriad of policies other than tariff duties. NTMs are complex legal texts specific to the product and applying country. They are more difficult to quantify or compare than tariffs. Depending on how they are applied, these measures may or may not amount to trade barriers.
Impact of non-tariff measures
NTMs particularly impact exporters and importers in developing and least developed countries (LDCs) who struggle with complex requirements. Firms in these countries often have inadequate domestic trade-related infrastructure and face administrative obstacles. NTMs that would not normally be considered very restrictive can represent major burdens in LDCs. In addition, the lack of export support services and insufficient access to information on NTMs impede the international competitiveness of firms. As a result, both NTMs applied by partner countries as well as domestic burdens have an impact on market access and keep firms from seizing the opportunities created by globalization.
Online course on NTMs
Online course on NTMs, the business survey and the results.
Different types of NTMs, and the structure to classify them.
ITC Programme on NTMs
Different components and activities of ITC Programme on NTMs.