Non-tariff measures (NTMs) are defined as ‘…policy measures other than ordinary customs tariffs that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both…’.
At the time of publication, over 2000 NTMs had been recorded through the World Trade Organisation (WTO) for 2016. Technical measures such as Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) notifications equate to more than 60% of all NTM notifications reported through the WTO. These notifications are of particular relevance to agricultural commodities.
Non-Tariff Measures and Trade Barriers
The World Trade Organization (WTO) provides guidelines for the application of NTMs. In essence, the WTO rules indicate that NTMs must be transparent, not overly restrictive to trade or applied arbitrarily. These rules help distinguish legitimate policy regulations and procedures from protectionist measures that may impede trade. The Australian Government supports the WTO rules.
In some instances, an NTM may be WTO-inconsistent and act as a barrier to trade for Australian agricultural products. The Australian Government is working with industry to address priority NTMs that are a barrier to trade and to reduce their impact.
Classification of Non-Tariff Measures
To assist in the identification and quantification of NTMs, the United Nations Conference on Trade and Development (UNCTAD) developed a universal classification system for NTMs. The UNCTAD classification of NTMs is essentially a taxonomy of all those measures considered relevant in today’s situation in international trade. The classification system consists of 16 chapters (A to P), with each individual chapter divided into groupings with up to three layers of subcategories (See table 1).
Table 1: The UNCTAD NTM classification table
This classification system acknowledges existence of measures and does not judge on legitimacy, adequacy, necessity or discrimination of any form of policy intervention used in international trade. It helps exporters worldwide to access transparent, reliable and comparable information and enables understanding of NTMs.
Actions to Address NTMs
Vast numbers of NTMs are released annually. As a result, it is not possible to address every NTM. The Australian Government believes that the best approach to addressing NTMs is to identify, quantify and prioritise NTMs of significance. Once the NTMs of significance have been identified, one or more of the following actions may be taken to address the measure:
- Refer to industry body for commercial resolution;
- The Department of Agriculture and Water Resources undertakes bilateral discussions with the relevant importing country authorities;
- Issue is raised in Free Trade Agreement (FTA) discussions;
- Australian Government addresses through international forums – e.g. international standard setting processes, SPS committee, TBT committee;
- Australian Government collaborates with like-minded countries; and
- Australian Government reviews whether the case is serious enough to lodge a dispute via the WTO.