NON TARIFF BARRIERS - SA Trade Hub · Non Tariff Barriers and SADC Protocol on Trade 14 Article 6: “Except as provided for in this Protocol, Member States shall, in relation to

NON TARIFF BARRIERS

Kathleen Montgomery

Regional Integration

Specialist

25 August 2011

Overview

• What are NTBs?

• What is the impact?

• NTBs in the SADC region

• How to address NTBs

2

What are NTBs?

• Any barrier to import/export that is not a tariff

• Non Tariff Barriers vs. Measures

• As tariff barriers are reduced through trade

negotiations, NTBs proliferate and increase in

their importance

• Welfare implications – tariff vs. NTB

3

Categories of NTBs

1. Government participation in trade & restrictive

practices tolerated by governments

2. Customs and administrative entry procedures

3. Technical barriers to trade (TBT)

4. Sanitary & phytosanitary (SPS) measures

5. Specific limitations

6. Charges on imports

7. Other (procedural problems)

4

Government Participation in Trade

• Export subsidies

• Government monopoly in export/import

• State subsidies, procurement, trading, state ownership

• Preference given to domestic bidders/suppliers

• Domestic assistance programmes for companies

• Import bans

• Multiplicity and Controls of Foreign exchange market

• "Buy national" policy

Example: Importation Ban on Day Old Chicks, Import Bans on

Potatoes

5

Customs and Administrative Entry

Procedures

• Government imposing antidumping duties

• Arbitrary customs classification

• Issues related to the rules of origin

• Import licensing

• Decreed customs surcharges

• Additional taxes and other charges

• International taxes and charges levied on imports and other

tariff measures

6

Customs and Administrative Entry

Procedures

Example: Customs officers arbitrarily verify goods in transit at various

check points and break seals for 100% physical verification leading to

delays, breakages for goods thinly packed in the container etc.

Customs could communicate with the next customs point at the border

for verification to avoid 100% verification along the way. In some

instances, the verification would have taken place at the point of

loading the goods.

Example: Exports go through unnecessary, onerous and costly testing

and documentation procedures, since the Bureau of Standards,

Ministry of Health and atomic energy authority each have to issue

export certification on every export consignment.

7

Technical Barriers to Trade

• Restrictive technical regulations and standards not based on international standards

• Inadequate or unreasonable testing and certification arrangements

• Standards disparities

• Intergovernmental acceptance of testing methods and standards

• Issues related to packaging, labelling and marking

• Conformity assessment related to TBT

• Inadequate infrastructure

8

SPS Measures

• Issues related to sanitary and phyto-sanitary

measures

• Conformity assessment related to SPS

Example: Multiple SPS testing offices.

9

Specific Limitations

• Quantitative restrictions

• Exchange controls

• Export taxes

• Quotas

• Import licensing requirements

• Proportion restrictions of foreign to domestic goods

(local content requirement)

• Minimum import price limits

10

Specific Limitations

Example: Police are charging fines to transporters although

their Registration Books have been notarised by the

Embassy. Notarised Documents are acceptable throughout

the country except in specific other areas… Transporters

entering through specific border posts are affected by these

fines. Authorities in these corridors do not accept certified

copies of the documents.

11

Charges on Imports

• Prior import deposits and subsidies

• Administrative fees

• Special supplementary duties

• Import credit discriminations

• Variable levies

• Border taxes

12

Other (procedural problems)

• Arbitrariness

• Discrimination

• Corruption

• Costly procedures

• Lengthy procedures

• Lack of information on procedures (or changes

thereof)

• Complex variety of documentation required

13

Non Tariff Barriers and SADC Protocol on Trade

14

Article 6: “Except as provided for in this Protocol, Member

States shall, in relation to intra-SADC trade:

(a) Adopt policies and implement measures to eliminate all

existing forms of NTBs

(b) Refrain from imposing any new NTBs

NTBs: “any barrier to trade other than import and export

duties”

Article 7 & 8: Explicitly call for removal of quantitative

import and export restrictions

NTBs in SADC Region

15

Form of NTB Products affected Volume of intra-SADC trade potentially affected (% of total)

Import bans, quotas & levies Wheat, beer, poultry, flour, meat, maize, UHT

milk, cement, sugar, eggs, pasta, sorghum, pork,

fruit & vegetables

6.1

Preferences denied Salt, fishmeal, pasta 0.4

Import permits & levies

Bread, livestock, liqour, cooking oils, oysters, UHT

milk, eggs, maize, sugar, fruit & vegetables

5.6

Single marketing channels

Wheat, sugar, maize, meat, dairy, , tea & tobacco 5.3

Rules of Origin Textiles & clothing, palm oil; soap; cake

decorations; rice; curry powder; wheat flour,

semi-trailers

3.0

Export taxes Dried beans, live animals, hides, skins, wood,

coffee, sugar, maize, meat, tobacco

5.8

Standards/SPS/TBT

Milk, canned tuna, , honey, bran, , poultry, sugar,

coffee, ostriches, batteries, maize, meat, cotton

cake, beer

2.5

Customs-related Wine, salt, electronic equipment, copper

concentrate, cosmetics, medicines

5.2

Examples: Dar Corridor

• Import Permitting

• SPS/TBT Restrictions

• Multiple Agencies for clearing imports

• Various fees paid to several agencies at border

• Transit, Carbon, Licensing, Loading

• 62 police checkpoints, 12 weighbridges, 3

transit checkpoints

16

Impact of NTBs?

• Increasing Costs

• Every day a truck spends waiting at a border

adds an extra $500 to transport costs

• Tariff Equivalent

• Substantial impact on welfare

• Impact on food security

• Heavily impact 1/5 of intra-SADC trade

17

Efforts to Reduce NTBs in SADC

• SADC Rules of Origin

• SADC Protocol on Trade calls for the removal

of all NTBs

• Cataloguing of measures

• Adopt schedule of reductions for NTBs

• tradebarriers.org

• Lack of prioritization

18

What can be done?

• Private Sector Advocacy

• Private Sector Organizations

• Firm Level

• Public Sector Information

• What is required?

• Dialogue

• PRIORITIZATION!

• What will the impacts be?

19

Conclusions/Summary

• Importance of NTBs to restricting trade

• Prioritization is key moving forward.

• What can the private sector do?

20

Contact Information

Kathleen Montgomery

[email protected]

www.satradehub.org

[email protected]