This article was first published by Exporter Today on 29 August 2017.
As part of Trade Agenda 2030, the government has launched a new online portal and NTB ‘clearing house’, and is promising an ‘flying squad’ to investigate complaints!
Non-tariff barriers (NTBs) cost New Zealand’s export portfolio US$5.9 billion a year, according to an analysis last year by the New Zealand Institute of Economic Research - which is why the government has made it a priority in Trade Agenda 2030.
Examples of NTBs include:
- Health and safety requirements
- Technical regulations and standards, including labelling and packaging requirements
- Administrative procedures
- Quantitative restrictions on imports
- Testing and certification requirements
- Licensing requirements, and
- Procurement rules.
Some of these measures will address matters of public interest and will be perfectly legitimate. They become non-tariff barriers (NTBs) when they restrict trade, and in some cases, often where there is no strong policy justification, they may breach international trade rules.
A study for the APEC Business Advisory Council earlier this year found that NTBs can reverberate all the way along the supply chain, resulting in increased compliance costs, uncertainties and time delays for business.
NTBs identified in the research ranged from requirements for impractical standardised container sizes, to shipments being rejected at port because of dust traces and to excessive red tape at customs control.
What can we do about NTBs?
There are rules in the World Trade Organisation (WTO) agreements and in New Zealand’s free trade agreements that address NTBs.
For example, there are rules to ensure that technical regulations are not more trade restrictive than necessary to achieve a legitimate purpose and do not treat foreign products differently to domestic products. Legitimate purposes include such things as the prevention of deceptive practices and the protection of national security, human, animal and plant life and health and the environment.
NTB issues can, in some cases, be resolved by government officials talking to their overseas counterparts but – in extreme cases – New Zealand may resort to bringing a claim against another country in the WTO’s dispute settlement system.
Examples of NTBs that have been subject to WTO dispute settlement include:
- A restrictive import licensing regime in Indonesia for horticultural products that restricted entry of New Zealand products.
- A set of conditions (such as the adoption of particular orchard inspection methodologies) imposed by Australia on New Zealand apple imports that meant exporting there wasn’t commercially worthwhile.
- A European requirement that only certain species of sardines could be marketed under the name of ‘sardines’ on the European market.
A non-tariff barrier clearing house…and flying squads
As part of Trade Agenda 2030, the government has launched a new online portal and NTB ‘clearing house’. This provides a form for exporters to register a trade barrier, which the government has committed to responding to within two days and developing a practical response plan within six weeks. And this may not be all, with the government promising an ‘NTB flying squad’ to investigate complaints!
Flying squads or not, the initiative is to be welcomed. To make it as effective as possible, exporters need to register any difficulties they are experiencing – even if you have found a work-around for your immediate business needs.
If one exporter is facing problems, it is likely that others are too, and the government can only intervene if it has the necessary information.
Exporters can register trade barriers here.
Tracey Epps is a trade law consultant at Chapman Tripp, and can assist with any export-related queries, including NTBs.