NON TARIFF BARRIERS – “YOU ARE NOT ALONE”

Non- tariff barriers (NTBS) have a pernicious effect on trade.  Sometimes it seems that just as tariffs go down, an NTB springs up!  They can be hard to identify and even harder to address.  The red meat industry, New Zealand’s second largest export earner, says they face NTBs of $1.5 billion.  Can anything be done ?  Yes – but it takes effort.

NTMs and NTBs

There are a range of regulations applied at the border and behind the border for legitimate reasons – biosecurity rules, safety standards, labelling requirements.  We call these non-tariff measures (NTMs).  They become non-tariff barriers (NTBs) when they are more trade restrictive than necessary – are applied selectively (only to some imports, or to imports and not locally produced goods, or to some country suppliers and not others), or not on the basis of “honest science”, or lack transparency.

Who ya gonna call?

The World Trade Organisation (WTO) and free trade agreements (FTAs) provide rules and more importantly agreed processes to enable our trade negotiators to tackle NTBs.  APEC has also agreed guidelines to prevent NTMs becoming NTBs – non-binding unfortunately – but useful none the less.   But sometimes that’s not enough to shift a recalcitrant trading partner. The bilateral route is often the best way to address NTBs and successive New Zealand governments have not been shy about applying that pressure.

Last year MFAT sorted 14 significant NTBs in a variety of sectors and markets worth $1.4 billion.  That’s great, but probably only the tip of the iceberg.  And there is evidence to suggest that around the world NTBs are becoming more prevalent as economies turn their backs on international trade rules.

That’s certainly what business is saying:  NTBs are still a problem – even when we have FTAs.  They affect all sectors but the impact on key export sectors like meat and dairy is most pronounced. There continues to be a lack of transparency in some markets around the introduction of new border measures.  NTBs linked to environmental policy inthe EU and US are becoming more evident.

NTBs are often unique and no one size fits all.   Information is key. Businesses should gather as much data and intelligence as possible about the nature of the problem and the impact on trade.   Engagement with agencies like MFAT and MPI is also necessary. 

Give us the solution please

NTBs are often unique and no one size fits all.   Information is key. Businesses should gather as much data and intelligence as possible about the nature of the problem and the impact on trade.   Engagement with agencies like MFAT and MPI is also necessary. There is a useful online tool  – www.tradebarriers.govt.nz – use it to dob in an NTB.  Officials have a range of tools they can use from raising the issue formally with the other government in a series of graduated steps right through to raising it at the WTO or even ultimately for the most egregious cases to initiating a dispute settlement process.  Sector bodies can also help amplify issues to the Government on an industry-wide basis.

NTBs can be hard nuts to crack.  The moral of the story – when it comes to NTBs, exporters are not alone! 

This blog post was prepared by Stephen Jacobi, Executive Director of NZIBF. They are based on remarks he gave at the Red Meat Sector Conference in Wellington on 23 July 2024.