April 25th 2017

Business / Economy

Developing countries lose $23 billion a year from non-tariff barriers to developed markets

For example, measures on the cleanliness and pathogen-free status of food known as sanitary and phytosanitary measures cover more than 60 percent of agricultural trade.

By Cyrus Mutaicmutai@kenyafreepress.comThursday, 21 Jul 2016 22:16 EAT

UNCTAD, meeting at its 14th session in Nairobi, has launched a database to list the non-tariff measures of 56 countries, covering 80 percent of the world trade, in a new initiative it hopes to promote competitiveness among countries.

According to new data published by UNCTAD on Tuesday, developing countries lose estimated $23 billion every year to non-tariff measures erected by developed countries.

This amount, which is equal to 10 percent of their exports to the Group of 20 (G20), is caused by failure to comply with G20 non-tariff measures since the developing countries fail to meet the standards required by the developed economies, thus closing the doors for them to export their products.

Non-tariff measures cover a range of legitimate and important policy instruments, including measures to protect the health of the country’s citizens and its environment which may include policies, licences, quotas, embargo and standards among other factors brought in by countries.

“These kinds of measures are becoming increasingly widespread,” said UNCTAD Deputy Secretary-General Joakim Reiter. “For example, measures on the cleanliness and pathogen-free status of food known as sanitary and phytosanitary measures cover more than 60 percent of agricultural trade.”

“Such regulatory measures disproportionately increase trade costs for small and medium-sized enterprises and developing countries, particularly the least developed countries," he said.

The UNCTAD deputy director added that developing countries don’t expect G20 countries to drop all their non-tariff measures, which serve important policy objectives such as health and safety, but there is need to manage them better.

“Non-tariff measures are the new frontier in our quest to global trade,” he added noting that better information would reduce the cost of non-tariff measures. “It is all about transparency and harmonizing regulations.”

Non-tariff measures hamper the movement of exports from developing countries into developed markets, hence affecting the export earnings and economies of the third world nations.

UNCTAD on Tuesday launched a database to list the non-tariff measures of 56 countries, covering 80 percent of the world trade which will allow policymakers to search by country and product to find out quickly the relevant non-tariff requirements making it easier for countries to find out the data.

“This database will improve countries’ ability to understand the regulatory requirements, helping them to comply more easily and at less cost,” said Guillermo Valles, Director of the Division on International Trade in Goods and Services, and Commodities.

The database will provide the necessary information on non-tariff measures so that negotiators can harmonize their regulations, cutting the costs of trade accelerating the growth of regional trade with African Union already requesting UNCTAD to support them with the Continental Free Area by setting up a similar database.

Non-tariff measures have a valuable contribution to make in achieving the Sustainable Development Goals, by protecting health and the environment.

The countries were urged to use non-tariff Measures to protect their citizens but should not let them compromise trade because they block economic growth and job creation.

Developed countries have used non-tariff measures to serve protectionist demands and have prevented exporters from the developing countries and the least developed countries to translate their comparative advantage in the trade of specific commodities and services.

With this new database, developing countries will have a better chance to export their goods and services providing mutual benefits as the other importing country will be able to get the goods and services of the standards they require.

The writer is a student of journalism at the Technical University of Kenya and intern writer at the Kenya Free Press, specializing in politics, sports, agribusiness and international affairs.





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