Transcript Slide 1

WORKSHOP ON WTO-RELATED ISSUES
NON TARIFF BARRIERS IN NORTH SOUTH TRADESRI LANKA’S COUNTRY PERSPECTIVE
By
Premathilake Jayakody
Assistant Director of Commerce
Department of Commerce
Sri Lanka
02nd May 2006
1
Defining Non Tariff Barriers
Non-Tariff measures include all measures,
other than tariffs, the effect of which is to
restrict imports, or to significantly distort
trade.
2


However although such measures restrict
trade, some of them have good intentions.
E.g. Health, safety, environment.
Many TBT and SPS measures do fall under
this category.
3
Why Countries Apply NTBs ?

Most of the non-tariff measures are the result of
the rules and regulations, which countries apply
at the border to imported products and to the sale
of such products in the domestic markets.

Non-tariff measures are considered necessary for
the attainment of national policy objectives.

However, the way they are applied may in practice
result in the creation of barriers to trade.
4
Why Countries Apply NTBs (con’d)
In the Tokyo Round, a number of Agreements were
adopted that lay down principles, guidelines and rules
which countries must follow in adopting rules in particular areas.
Most of these Agreements have been further improved and
strengthened in the Uruguay Round of Trade Negotiations.
The Agreements in brief are:
Agreement
on Customs Valuation
Agreement on Import Licensing Procedures
Understanding on Balance of Payment Measures
Agreement on Technical Barriers to trade
Agreement on Safeguards
Agreement on Subsidies and Countervailing Measures
5
Most Common NTBs Used by Various Countries
















Sanitary and Phytosanitory Measures (SPS)
Technical Regulations (TBT)
Import Licensing
Export Price Restraints
Variable Charges
Safeguards
Anti-dumping and Countervailing Actions
Charges on Imported Goods
Customs Procedures
Minimum Import Price
Market Labeling Practice
Port Restrictions
Quantitative / Marketing Restrictions
Rules of Origin
Preferential Access
Packaging Requirements
6
NTBs Severely Affecting Exports of
Developing Countries









Technical Barriers to Trade (TBT)
Agreement on Sanitary and Phytosanitory
Measures (SPS)
Safeguards Anti-dumping and Countervailing
Actions
Customs Procedures
Port Restrictions
Quantitative / Marketing Restrictions
Rules of Origin
Preferential Access
Packaging Requirements
7
Global Trends in NTBs Affecting Developing
Countries (with reference to a Study done for the
OECD Trade Policy Working Paper by Barbara Fliess and
Iza Lejarraga) (con’d)
TBT:



It has been found that technical barriers to trade are severe
obstacles to exports to developed countries whose technical
regulations, standards and conformity assessment procedures
may effectively serve as border-protection instruments.
Developing countries have to spur new competitive
advantages and investment in technological capability if they
are to overcome this problem effectively.
This scenario is less likely to materialize in developing
countries, given the significant technological and financial
constraints they face.
8
Global Trends in NTBs Affecting Developing
Countries (with reference to a Study done for the
OECD Trade Policy Working Paper by Barbara Fliess and
Iza Lejarraga)
(con’d)
OTHER MEASURES:
 Many studies have shown a growing concern about
measures in developed – country markets that may have
trade – restrictive effects.


At issue are rules and regulations associated with
environment, national security, labor and other social
standards.
While the above measures are legitimate areas for
regulation, bioterrorism rules, child labor clauses, and
environment standards are at times perceived as being
more trade restrictive than necessary to achieve
intended goals .
9
Global Trends in NTBs Affecting Developing
Countries (with reference to a Study done for the OECD
Trade Policy Working Paper by Barbara Fliess and Iza
Lejarraga) (con’d)



Globally, the existing body of literature conveys a few key
findings and trends pertaining to developing countries. Most
analysts observe that the utilization of certain types of NTBs
affecting these countries, such as quantitative restrictions,
have markedly decreased in the post-Uruguay Round setting
The remaining post-Uruguay NTBs, according to the
frequency ratio analysis conducted by Michalopoulos (1999)
and others, appear to be more prevalent in developing than in
developed-country markets, although they have decreased
over time.
Michalopulos (1999) notes that frequency ratios of quantity
and price control measures tend to be higher in countries with
lower levels of per capita income and lower degrees of
openness.
10
The Measures that are in place in Sri LankaImport Sector
The Measure
Reasons for application
Relevant WTO
Provisions
Remarks
Import prohibitions,
which apply to
a range of
goods,
They are maintained for health,
safety, security,
environment, and moral
reasons
Article XX of the
GATT
Article XXI
of the GATT
Annex - XII Import
prohibitions
Import Licensing
Regime
They are introduced on
considerations of national
security, health,
environment, public moral
Article XX of the
GATT
Article XXI
of the GATT
At present there are 546
items at 6-digit level
items remain under
licence.
Standards and
Technical
Regulations
For the certification of products
and systems for health and
safety reasons
Article XX of the
GATT
The Food Act No.26 of
1980
Sri Lanka Standards
Institution
Plant and Animal
Quarantine
This is to ensure that exotic
diseases are not introduced
through the importation of
livestock and livestock
products
Article XX of the
GATT
The Plant Protection Act
No.35 of 1999
The Animal
Diseases Act No.59
of 1992
11
The Measures that are in place in Sri LankaExport Sector
Tariffs and Levies;

Export duties were withdrawn by 1992, except for few
items levied for non-economic reasons. Fiscal levies
(Cess) and Royalty fees are levied on exports. The Customs
Department collects the levies and royalty on certain items
on behalf of other institutions.
The product categories that are subjected to Cess and
Royalties.
Coconut Products
Conch shells
Natural rubber
Non-ferrous scrap
Iron or non-alloy steel products
Tea
Quartz
Raw Hides
Cashew nuts
Metal Chanks
Elephants
12
Case Studies in
Sri Lanka
13
Export of aquaculture products
to the EU


Fisheries products to the EU were governed
by regulations on import of animal
products destined for human consumption
These regulations required overall that there be
a monitoring system in place to ensure that
such products do not contain excessive
levels of residues of pesticides and
veterinary medicinal substances
14
Aquaculture exports (con’d)

Sri Lanka was required to establish such a
system from the beginning including:



Appointing the Fisheries Department as the
Competent Authority
Identifying and obtaining accreditation for
testing laboratories
Drafting and passing relevant regulations on
quality of aquaculture products
15
Aquaculture exports (con’d)


System took several years to establish but
Sri Lanka is currently recognized as a third
country permitted to export aquaculture
products to the EU
However, problems exist such as cost of
testing
16
Export of bees’ honey





Sri Lanka has a potential for export of bees’
honey
However, bees’ honey falls under the same
regulations as aquaculture products
There is no monitoring system meeting the
stringent requirements of the EU
There is no flexibility, despite the fact production
of bees’ honey is generally organic and will not
use pesticides or medicinal substances
This is a fledgling industry which could be
helped by expanding into markets such as the
EU
17
Export of bees’ honey (con’d)



However, there is a problem of time in
establishing this monitoring system and
submission of the monitoring plan
In addition, it is very costly to do the kind
of testing required to satisfy EU
requirements
In addition, some testing facilities may not
be present
18
Ban on Genetically Modified Foods


Sri Lanka also faced problems with regards to
imposing its own SPS measures in respect of
GMFs
Initially, Sri Lanka imposed regulations



Banning the import of GMFs and
Banning the import of certain food types such as soya
and tomatoes without a certification they were GM
free
However, pressure from large exporters from
Northern countries led to Sri Lanka suspending
these regulations indefinitely
19
General Problems Sri Lanka is
facing or could face


Lack of technical capacity to ensure
product standards are in conformity with
technically
advanced
standards,
particularly those of developed countries
Lack of financial capacity


To implement production methods
To establish comprehensive testing facilities
20
General Problems Sri Lanka is
facing or could face (con’d)


Need for specialized technical experts to defend
Sri Lanka’s interests e.g. legal experts in trade
remedies
Need for extensive networking and cooperation
between a wide cross-section of government
institutions and private sector companies/
individuals to ensure Sri Lanka’s interests are
protected
21
SAARC Common Position on NTBs at WTO
Ministerial Conferences



“Reject the new forces of protectionism that are disguised
as concerns about the environment, social conditions, labor
standard, and all other forms of non-tariff barriers”. These are
not trade related issues and should be kept out of the multi –
lateral trading system.
“The Uruguay Round negotiations did not result in greater market
access for the exports of developing and least developed
countries as was expected, due to the existence of ‘tariff
peaks”, the phenomenon of tariff escalation, and the use of
NTBs in respect of products of export interest to the developing
and least developed countries. Action should be taken to ensure
effective market access for the exports of these countries”
Least Developed countries should be granted duty-free
access on an autonomous basis for their exports by the
developed countries. These should be exempt from
antidumping duties, safeguard action and NTBs.
22
THANK YOU !
23