Non-tari barriers to trade

Non-tari barriers to trade (NTBs) or sometimes

called "Non-Tari Measures (NTMs)" are trade barriers that restrict imports, but are unlike the usual form of a
tari; And Tari Barriers restricts Exports. Some common examples of NTBs are anti-dumping measures and
countervailing duties, which, although called non-tari
barriers, have the eect of taris once they are enacted.
Example of Tari Barrier is Export Duty.

(b) Anti-dumping practices

(c) Tari classications
(d) Documentation requirements
(e) Fees
3. Standards:
(a) Standard disparities

Their use has risen sharply after the WTO rules led to a
very signicant reduction in tari use. Some non-tari
trade barriers are expressly permitted in very limited circumstances, when they are deemed necessary to protect
health, safety, sanitation, or depletable natural resources.
In other forms, they are criticized as a means to evade free
trade rules such as those of the World Trade Organization
(WTO), the European Union (EU), or North American
Free Trade Agreement (NAFTA) that restrict the use of
taris.

(b) Intergovernmental acceptances of testing

methods and standards
(c) Packaging, labeling, and marking
4. Government Participation in Trade:
(a) Government procurement policies
(b) Export subsidies
(c) Countervailing duties
(d) Domestic assistance programs

Some of non-tari barriers are not directly related to foreign economic regulations but nevertheless have a signicant impact on foreign-economic activity and foreign
trade between countries.

5. Charges on imports:
(a) Prior import deposit subsidies
(b) Administrative fees

Trade between countries is referred to trade in goods, services and factors of production. Non-tari barriers to
trade include import quotas, special licenses, unreasonable standards for the quality of goods, bureaucratic delays at customs, export restrictions, limiting the activities
of state trading, export subsidies, countervailing duties,
technical barriers to trade, sanitary and phyto-sanitary
measures, rules of origin, etc. Sometimes in this list they
include macroeconomic measures aecting trade.

(c) Special supplementary duties

(d) Import credit discrimination
(e) Variable levies
(f) Border taxes
6. Others:
(a) Voluntary export restraints
(b) Orderly marketing agreements

SIX Types of Non-Tari Barriers

2 Examples of Non-Tari Barriers
to Trade
to Trade

1. Specic Limitations on Trade:

Non-tari barriers to trade can be the following:

(a) Import Licensing requirements

(b) Proportion restrictions of foreign domestic
goods (local content requirements)

Import bans

(c) Minimum import price limits

General or product-specic quotas

(d) Fees

Rules of Origin

(e) Embargoes

Quality conditions imposed by the importing country on the exporting countries

2. Customs and Administrative Entry Procedures:

Sanitary and phytosanitary conditions

(a) Valuation systems

1

3 TYPES OF NON-TARIFF BARRIERS

Packaging conditions

the system of minimum import prices, etc. Under second category follow methods that are not directly aimed
Labeling conditions
at restricting foreign trade and more related to the administrative bureaucracy, whose actions, however, restrict
Product standards
trade, for example: customs procedures, technical stanComplex regulatory environment
dards and norms, sanitary and veterinary standards, requirements for labeling and packaging, bottling, etc. The
Determination of eligibility of an exporting country
third category consists of methods that are not directly
by the importing country
aimed at restricting the import or promoting the export,
Determination of eligibility of an exporting estab- but the eects of which often lead to this result.
lishment (rm, company) by the importing country. The non-tari barriers can include wide variety of restric-

Additional trade documents like Certicate of Origin, Certicate of Authenticity etc.

Occupational safety and health regulation
Employment law

tions to trade. Here are some example of the popular

NTBs.

3.1 Licenses

The most common instruments of direct regulation of

imports (and sometimes export) are licenses and quoState subsidies, procurement, trading, state owner- tas. Almost all industrialized countries apply these nonship
tari methods. The license system requires that a state
(through specially authorized oce) issues permits for
Export subsidies
foreign trade transactions of import and export commodities included in the lists of licensed merchandises. ProdFixation of a minimum import price
uct licensing can take many forms and procedures. The
Product classication
main types of licenses are general license that permits unrestricted importation or exportation of goods included in
Quota shares
the lists for a certain period of time; and one-time license
for a certain product importer (exporter) to import (or
Foreign exchange market controls and multiplicity
export). One-time license indicates a quantity of goods,
Inadequate infrastructure
its cost, its country of origin (or destination), and in some
cases also customs point through which import (or export)
Buy national policy
of goods should be carried out. The use of licensing sysOver-valued currency
tems as an instrument for foreign trade regulation is based
on a number of international level standards agreements.
Intellectual property laws (patents, copyrights)
In particular, these agreements include some provisions
of the General Agreement on Taris and Trade and the
Restrictive licenses
Agreement on Import Licensing Procedures, concluded
Seasonal import regimes
under the GATT (GATT)..

Import licenses

Corrupt and/or lengthy customs procedures

3.2 Quotas

Types of Non-Tari Barriers

Licensing of foreign trade is closely related to quantitative restrictions quotas - on imports and exports of certain goods. A quota is a limitation in value or in physical
terms, imposed on import and export of certain goods for
a certain period of time. This category includes global
quotas in respect to specic countries, seasonal quotas,
and so-called voluntary export restraints. Quantitative
controls on foreign trade transactions carried out through
one-time license.

There are several dierent variants of division of nontari barriers. Some scholars divide between internal
taxes, administrative barriers, health and sanitary regulations and government procurement policies. Others divide non-tari barriers into more categories such as specic limitations on trade, customs and administrative entry procedures, standards, government participation in
trade, charges on import, and other categories.
Quantitative restriction on imports and exports is a direct
The rst category includes methods to directly import re- administrative form of government regulation of foreign
strictions for protection of certain sectors of national in- trade. Licenses and quotas limit the independence of endustries: licensing and allocation of import quotas, an- terprises with a regard to entering foreign markets, nartidumping and countervailing duties, import deposits, so- rowing the range of countries, which may be entered into
called voluntary export restraints, countervailing duties, transaction for certain commodities, regulate the num-

3.3

Embargo

ber and range of goods permitted for import and export.

However, the system of licensing and quota imports and
exports, establishing rm control over foreign trade in
certain goods, in many cases turns out to be more exible and eective than economic instruments of foreign
trade regulation. This can be explained by the fact, that
licensing and quota systems are an important instrument
of trade regulation of the vast majority of the world.

of necessary food, supplies of which may decrease in case

of bad weather or political conditions.

3.2.1

3.4 Standards

Export quotas can be set in order to provide domestic

consumers with sucient stocks of goods at low prices,
to prevent the depletion of natural resources, as well as
to increase export prices by restricting supply to foreign
markets. Such restrictions (through agreements on various types of goods) allow producing countries to use quoThe consequence of this trade barrier is normally re- tas for such commodities as coee and oil; as the result,
ected in the consumers loss because of higher prices and prices for these products increased in importing counlimited selection of goods as well as in the companies that tries.
employ the imported materials in the production process, A quota can be a tari rate quota, global quota, discrimincreasing their costs. An import quota can be unilateral, inating quota, and export quota.
levied by the country without negotiations with exporting
country, and bilateral or multilateral, when it is imposed
after negotiations and agreement with exporting country. 3.3 Embargo
An export quota is a restricted amount of goods that can
leave the country. There are dierent reasons for impos- Embargo is a specic type of quotas prohibiting the trade.
ing of export quota by the country, which can be the guar- As well as quotas, embargoes may be imposed on imports
antee of the supply of the products that are in shortage in or exports of particular goods, regardless of destination,
the domestic market, manipulation of the prices on the in respect of certain goods supplied to specic countries,
international level, and the control of goods strategically or in respect of all goods shipped to certain countries.
important for the country. In some cases, the importing Although the embargo is usually introduced for political
countries request exporting countries to impose voluntary purposes, the consequences, in essence, could be ecoexport restraints.
nomic.
Agreement on a voluntary export restraint

In the past decade, a widespread practice of concluding agreements on the voluntary export restrictions and
the establishment of import minimum prices imposed by
leading Western nations upon weaker in economical or
political sense exporters. The specics of these types of
restrictions is the establishment of unconventional techniques when the trade barriers of importing country, are
introduced at the border of the exporting and not importing country. Thus, the agreement on voluntary export
restraints is imposed on the exporter under the threat of
sanctions to limit the export of certain goods in the importing country. Similarly, the establishment of minimum import prices should be strictly observed by the exporting rms in contracts with the importers of the country that has set such prices. In the case of reduction of
export prices below the minimum level, the importing
country imposes anti-dumping duty, which could lead to
withdrawal from the market. Voluntary export agreements aect trade in textiles, footwear, dairy products,
consumer electronics, cars, machine tools, etc.

Standards take a special place among non-tari barriers.

Countries usually impose standards on classication, labeling and testing of products in order to be able to sell
domestic products, but also to block sales of products of
foreign manufacture. These standards are sometimes entered under the pretext of protecting the safety and health
of local populations.

Problems arise when the quotas are distributed between

countries because it is necessary to ensure that products
from one country are not diverted in violation of quotas
set out in second country. Import quotas are not necessarily designed to protect domestic producers. For example,
Japan, maintains quotas on many agricultural products it
does not produce. Quotas on imports is a leverage when
negotiating the sales of Japanese exports, as well as avoiding excessive dependence on any other country in respect

Another example of foreign trade regulations is import

deposits. Import deposits is a form of deposit, which the
importer must pay the bank for a denite period of time
(non-interest bearing deposit) in an amount equal to all or
part of the cost of imported goods.

3.5 Administrative and bureaucratic delays at the entrance

Among the methods of non-tari regulation should be
mentioned administrative and bureaucratic delays at the
entrance, which increase uncertainty and the cost of
maintaining inventory.

3.6 Import deposits

At the national level, administrative regulation of capital movements is carried out mainly within a framework
of bilateral agreements, which include a clear denition
of the legal regime, the procedure for the admission of

investments and investors. It is determined by mode

(fair and equitable, national, most-favored-nation), order
of nationalization and compensation, transfer prots and
capital repatriation and dispute resolution.

REFERENCES

while use of other NTBs increased from 55% in 1994 to

85% in 2004.

Increasing consumer demand for safe and environment

friendly products also have had their impact on increasing
popularity of TBT. Many NTBs are governed by WTO
agreements, which originated in the Uruguay Round (the
3.7 Foreign exchange restrictions and for- TBT Agreement, SPS Measures Agreement, the Agreeeign exchange controls
ment on Textiles and Clothing), as well as GATT articles.
NTBs in the eld of services have become as important
Foreign exchange restrictions and foreign exchange con- as in the eld of usual trade.
trols occupy a special place among the non-tari reguMost of the NTB can be dened as protectionist mealatory instruments of foreign economic activity. Foreign
sures, unless they are related to diculties in the marexchange restrictions constitute the regulation of transket, such as externalities and information asymmetries beactions of residents and nonresidents with currency and
tween consumers and producers of goods. An example of
other currency values. Also an important part of the
this is safety standards and labeling requirements.
mechanism of control of foreign economic activity is the
establishment of the national currency against foreign cur- The need to protect sensitive to import industries, as well
as a wide range of trade restrictions, available to the govrencies.
ernments of industrialized countries, forcing them to resort to use the NTB, and putting serious obstacles to international trade and world economic growth. Thus, NTBs
4 History
can be referred as a new of protection which has replaced
taris as an old form of protection.

4.1

The transition from taris to nontari barriers

One of the reasons why industrialized countries have

moved from taris to NTBs is the fact that developed
countries have sources of income other than taris. Historically, in the formation of nation-states, governments
had to get funding. They received it through the introduction of taris. This explains the fact that most developing countries still rely on taris as a way to nance their
spending. Developed countries can aord not to depend
on taris, at the same time developing NTBs as a possible
way of international trade regulation. The second reason
for the transition to NTBs is that these taris can be used
to support weak industries or compensation of industries,
which have been aected negatively by the reduction of
taris. The third reason for the popularity of NTBs is the
ability of interest groups to inuence the process in the
absence of opportunities to obtain government support
for the taris.

4.2

Non-tari barriers today

5 Addressing Non-Tari Barriers

The scarcity of information on non-tari barriers is a major problem to the competitiveness of developing countries. As a result, the International Trade Centre conducted national surveys and began publishing a series of
technical papers on non-tari barriers faced in developing countries. By 2015 it launched the NTM Business
Surveys website listing non-tari barriers from company
perspectives.

6 See also
Arms embargo
Arms Export Control Act (United States)
Economic sanctions

Non-violation nullication of benets

With the exception of export subsidies and quotas, NTBs
Trade Facilitation and Development
are most similar to the taris. Taris for goods production were reduced during the eight rounds of negotiations
in the WTO and the General Agreement on Taris and
Trade (GATT). After lowering of taris, the principle of
7 References
protectionism demanded the introduction of new NTBs
such as technical barriers to trade (TBT). According to
statements made at United Nations Conference on Trade 7.1 Bibliography
and Development (UNCTAD, 2005), the use of NTBs,
Evans, G., Newnham, J., Dictionary of International
based on the amount and control of price levels has deRelations; Penguin Books, 1998
creased signicantly from 45% in 1994 to 15% in 2004,

5
Filanlyason, J., Zakher M., The GATT and the regulation of Trade Barriers: Regime Dynamic and
Functions; International Organization, Vol. 35, No.
4, 1981
Frieden, J., Lake, D., International political economy: perspectives on global power and wealth, London: Routledge, 1995
Manseld, E., Busch, M., The political economy of
Non-tari barriers: a cross national analysis; International Organization, Vol. 49, No. 4, 1995
Oatley,T., International political economy: interests and institutions in the global economy; Harlow:
Longman, 2007
Roorbach, G., Taris and Trade Barriers in Relation
to International Trade; Proceedings of the Academy
of Political Science, Vol. 15, No 2, 1993
Yu, Zhihao, A model of Substitution of Non-Tari
Barriers for Taris; The Canadian Journal of Economics, Vol. 33, No. 4, 2000
World Trade Organization Website, Non-tari barriers: red tape, etc.; http://www.wto.org/english/
thewto_e/whatis_e/tif_e/agrm9_e.htm

External links
ITCs UNDERSTANDING NON-TARIFF OBSTACLES TO TRADE IN GOODS: THE
BUSINESS PERSPECTIVE (2013) A series of
technical papers based on large-scale company surveys in developing countries to improve knowledge
of NTM barriers.
ITCs Market Access Map, an online database of
customs taris and market requirements.
The WTOs Integrated Trade Intelligence Portal
I-TIP provides statistical and detailed information
on non-tari measures notied by WTO members.
The WTO'S Trade Monitoring Database provides
information on trade measures taken by WTO members and observers since October 2008.
World Banks World Integrated Trade Solution
(WITS) provides access to trade, tari and nontari data.
NTM Network Wiki serves as both a place for researchers to nd and add content related to nontari measures and discuss research and ideas.
Sheila Page (2010) What happens after trade agreements? Overseas Development Institute

Trade Costs and Facilitation: The Development Dimension, the main World Bank project on trade facilitation, economic growth and development.
Agritrade website for ACP-EU agriculture and sheries trade issues.

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