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Trade costs of NTMs now more than double that of tariff

FE Online Report | Published: October 14, 2019 14:07:06 | Updated: October 15, 2019 10:01:31


FE file photo used for representation. Courtesy: ADB

Though Non-Tariff Measures (NTMs) often serve legitimate and important public policy objectives, trade costs of these measures are more than double that of ordinary customs tariffs, according to a new report.

It also estimated that cost of two major NTMs, sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBTs), is up to 1.60 per cent of global Gross Domestic Product, amounting to $1.4 trillion.

The Asia-Pacific Trade and Investment Report 2019 (APTIR), formally launched on Monday, estimated the cost.

United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the United Nations Conference on Trade and Development (UNCTAD) jointly prepared and published the report in Geneva.

The report said that around 58.0 per cent of trade in Asia and the Pacific region is affected by NTMs.

It mentioned that one reason for the rise of NTMs is their ‘growing popularity as weapons of trade policy in regional and global trade tensions.’

“This can include government procurement limitations, subsidies to export and import restrictions as well as import and export bans through unilateral or multilateral sanctions,” added the report. “Meeting these complex and often opaque rules can require significant resources, affecting in particular SMEs.”

The report, however, also noted that NTMs as policy instruments can often be legitimate.

“Most of the NTMs are technical regulations, such as sanitary and phytosanitary requirements on food,” it pointed out.

 “But they also serve important purposes such as protection of human health or the environment; and can even boost trade under certain conditions,” it added.

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