Professional Documents
Culture Documents
Saftafinal PPT6
Saftafinal PPT6
SAFTA
(Trade Liberalisation Programme - Non Tariff Barriers)
Presented by
Contents
I. Smooth Functioning of SAFTA: Major Challenges II. NTBs: A Major Concern Worldwide III. NTBs: Experience of Developing Countries IV. NTBs Applied by South Asian Countries V. NTBs Facing by South Asian Countries within the Region VI. Removing NTBs: Lessons from AFTA VII. Conclusion
2
These measures indicate elimination of non-tariff barriers (NTBs) will be a major trade task in order to enhance intra-regional trade in South Asia.
y A staggering 40% of LDC exports are subject to non-tariff barriers. For developing and transition economies and developed countries, the figure is only 15%. 5
Even with preferential agreements that grant LDCs duty-free access to markets, non-tariff barriers may prevent these countries from entering those markets.
y In fact, between 1996 and 2001, the share of duty-free LDC exports in their total exports-excluding oil and arms-fell sharply from 81% to 69%. This has hardly been in line with the spirit of the Uruguay Round.
y According to UNCTADs TCMCS/TRAINS, technical measures as well as quantitative measures increased considerably during the period 1994-2004. y The nature of most NTBs as actually applied, however, changed. y Core measuresmeant to protect local producersdeclined.
On a sectoral basis, the top five sectors affected by NTBs are: y Chemicals (11.5%) y Machinery and equipment (9.2%) y Textiles and clothing (9.2%) y Motor vehicles and parts (7.3%) y Fish/fishery products (6.1%)
y The results of OECD surveys with the business communities in several developed and developing countries (in 1995-2002) suggest that natural resource-based industries are most strongly affected by NTBs.
7
(contd)
y In many developed countries, regulatory policy focuses on protection of the environment, public health and safety and often includes higher standards for the domestic market than existing international standards. y It has been estimated that African banana exports could grow by $410 million a year if the EU used international standards for traceability requirements and regulations on pesticide residues for agricultural imports, instead of its own standards. y Overall, it is estimated that at least 10 per cent of export losses of all developing countries arise from SPS/TBT related measures. y Technical barriers have become a key concern regarding market access. Annual notifications of new technical barriers to GATT/WTO increased steadily from a dozen or two in the early 1980s to over 400 in 1999. y Low- and middle-income countries reported that over the period from 199699 more than 50 percent of their potential exports of fresh and processed fish, meat, fruit and vegetables into the EU were prevented by their inability to comply with SPS requirements (OECD, 2001b).
9
y From the above, one important challenge for the current WTO multilateral negotiations is to allow Governments to achieve their genuine regulatory objectives while preventing protectionist abuses. y Another challenge for the multilateral negotiations is to ensure that NTB rules in RTAs (both North-South and SouthSouth) are coherent and compatible with the relevant WTO multilateral rules and disciplines.
10
(contd)
y It cannot be denied that developing countries need to take steps to improve their legal and regulatory environment to support the participation of their national firms in international markets and enhance their competitiveness. Product standards and domestic sector regulations are areas that require attention. y The modernization of standards systems, including institutions and infrastructure for certification, is essential for operating in the current global trade environment. y Meeting international standards for quality, safety, health, environment and consumer protection is increasingly becoming a precondition for competing in international markets. It has also become a major factor constraining many exporters, particularly in the LDCs, from benefiting fully from preferential access initiatives. y Technical assistance for raising capacity to comply with regulations and standards should also be strengthened. y The participation of developing countries in international standard setting activities should be facilitated. y Finally, the promotion of mutual recognition agreements (MRAs) between developed and developing countries, as well as among developing countries, will also help substantively in reconciling frictions and disputes caused by different regulations between trading partners and lead to large cost savings for exporting firms worldwide.
11
Issues
Description
India
Import Licensing
y India has eliminated its import licensing requirements for most consumer goods. Importers of vehicles of any type face restrictive and trade-distorting import practices. y India continues to maintain a negative import list. The negative list is currently divided into three categories: (1) banned or prohibited items; (2) restricted items which require a nonautomatic import license and (3) "canalized" items importable only by government trading monopolies subject to cabinet approval regarding timing and quantity. y India has liberalized many restrictions on the importation of capital goods. The government allows imports of all secondhand capital goods by the end-users without requiring an import license, provided the goods have a residual life of five years.
12
(contd)
Issues
Description
y Indian Customs requires extensive documentation, which inhibits the free flow of trade and leads to frequent processing delays. In large part these delays are a consequence of Indias complex tariff structure and multiple exemptions, which may vary according to product, user, or specific Indian export promotion program. y India introduced a reference price system for soybean oil in September 2002 to address alleged under-invoicing. y Certain customs procedures impede importation of automotive products. Motor vehicles may be imported through only three specific ports and only from the country of manufacture. Declared transaction values of automotive products may be rejected, insofar as legitimate reductions in the wholesale price of such products are ignored.
13
(contd)
Standards, y The GOI has identified 109 specific commodities that the BIS Testing, must certify before the products are allowed to enter the Labeling country. A system now exists by which foreign companies can and receive automatic certification for products made outside Certification India provided BIS has first inspected the production facility.
y In 2004, Indian Customs began to require registration or an exemption certificate for imported boric acid. The Ministry of Agriculture's Central Insecticides Board and Registration Committee has not yet published criteria and procedures for obtaining this documentation. y India's procedures for establishing emissions standards are non-transparent. Even the latest low-emission technology used by developed country-manufacturers fails to meet India's requirements. y In 2001, India banned textile and apparel imports that contain certain dyes. In January 2004, the GOI relaxed its textiletesting requirement by announcing that it would accept, as proof of the absence of azo-dye, certification that the exporting country had banned azo-dyes in textiles.
14
(contd)
y In 2003, the Ministry of Health implemented amendments under its PFA Act which could potentially restrict Indian imports of several agricultural products. In addition, at the end of 2003, the MOA issued a set of new phytosanitary regulations and quarantine requirements for imports of agricultural products. GOI implementation of these measures prior to notifying them to the WTO SPS Committee restricted Indian imports of almonds, pulses, fresh fruits and vegetables. Furthermore, new requirements affecting solid Wood Packaging Material (SWPM), affected adversely to exports of other countries nonagricultural products. y The Indian government has implemented several sanitary restrictions, which do not appear to coincide with the Office of International Epizootics (OIE) and CODEX recommendations. Such restrictions have affected Indian imports of poultry and poultry products, and pet food and dairy products. y The GOI reports that it is currently reviewing its policy for evaluating the safety of biologically engineered foods. In 2002, the Genetic Engineering Approval Committee (GEAC), conditionally approved the import of refined soy oil and crude de-gummed soy oil. It declined to consider importation of a cornsoy blend (CSB) without a special certification.
15
(contd)
y In case of pharmaceutical markets, while the scope of the rigid government-controlled pricing system has been reduced, final steps to eliminate it have stalled. y Indian states fail to apply consistently certain national laws and regulations. This creates uncertainty for foreign companies exporting to, and investing in India. Foreign companies affected by such inconsistency that include: pesticide manufacturers whose products have been approved at the national level and banned at the state level, and distilled spirits producers who face nonuniform state-level taxes despite the national governments directive to harmonize such taxes. In addition, taxes on inter-state trade and conflicting regulations continue to hamper the free flow of goods within India. y Indias implementation of its antidumping regime has raised concerns in key areas such as transparency and due process. India continued aggressively to apply its antidumping law over the past year. From the second half of 2003 through the first half of 2004, which is the most recent 12-month period for which WTO statistics are available, India imposed 38 final antidumping measures, more than any other WTO Member, and ranked second in the number of initiations.
16
(contd)
y Pakistans trade policy in 2005 continued to ban the import of 30 items, mostly on religious, environmental, security, and health grounds. Effective July 1, 2005, Pakistan further reduced duties on imported automobiles to between 50% and 75% from the previous range of 75% to 150%. The government exempted all domestically produced pharmaceutical related inputs from its General Sales Tax (GST). Imported pharmaceutical inputs subject to a 10% customs duty are also exempt from payment of GST. y In January 2000, the Pakistani government began implementing a transactional valuation system, pursuant to which 99% of import valuation is based on invoice value, in accordance with the WTO's Customs Valuation Agreement. A number of traders in food and nonfood consumer products, however, report experiencing irregularities and deviations in the application of that system. y A U.S. freight forwarding company reported in 2005 that Pakistan imposed a new SRO requiring that the commercial invoice and the packing list must be included within a container. This practice is difficult in situations when shipments originate from a location that is different from where the invoice and packing list are created; when, for security, invoices are created after the shipment departs; or when several companies are involved.
17
(contd)
y As of June 30, 2005, Pakistan Standards and Quality Control Authority (PSQCA) had established over 21,000 standards (including 15,500 ISO standards) for agriculture, food, chemicals, civil and mechanical engineering, electronics, weights and measures, and textile products. However, no new standards were approved in 2005. y Testing facilities for agricultural goods are inadequate and standards are inconsistently applied. Generally, however, foreign exporters have not reported problems due to the restrictive application of SPS or environmental standards. y Pakistan approved biosafety guidelines and rules in April 2005, but the action plan to implement these guidelines is still pending. At present Pakistan has permitted the import of biotech soybeans. The delay in the implementation of biosafety guidelines, however, has impeded the introduction of other biotechnology products.
18
(contd)
y Import tariffs and other import charges: Currently, there are 5 tariff bands of 0 percent, 2.5 percent, 6 percent, 15 percent, and 28 percent. Textiles, pharmaceuticals, and medical equipment are free of duty. Basic raw materials are generally assessed a 2.5 percent duty. Semiprocessed raw material tariffs are 6 percent, while intermediate product tariffs are 15 percent. Most finished products are at 28 percent. There are also a number of deviations from the five-band tariff policy (Tobacco and cigarette). In addition, there are specific duties on certain items, including footwear, ceramic products, and agricultural products. Imports for export industries enter duty free. y Export Development Board (EDB) Levy: In November 2004, the Sri Lankan government introduced a new additional tax on a range of imports identified as non-essential. The EDB levy is applied on C.I.F value, and ranges from 10 percent to 20 percent. y Import prices are increased by 7 percent (by adding an imputed profit margin) when calculating the VAT and excise duty. y According to U.S. trade data, the total value of imports affected by the EDB will be about $5 million out of a total of about $143 million annual U.S. exports to Sri Lanka. The total effect on U.S. exports could be much higher, while calculating U.S.-sourced products sent via other trading hubs. 19
(contd)
y Sri Lanka requires import licenses for over 300 items at the 6-digit level of the Harmonized System (HS) code, mostly for health, environment, and national security reasons. Importers must pay a fee equal to 0.1 percent fee of the import price to receive an import license. y The Government of Sri Lanka implemented the WTO Customs Valuation Agreement in January 2003 and follows the transaction value method to determine the C.I.F. value. Customs is also in the process of installing an Electronic Data Interchange (EDI) system to support an automated cargo clearing facility. When implemented, this system should improve customs administration and facilitate trade. y There are 85 items that come under the Sri Lanka Standards Institution (SLSI) mandatory import inspection scheme. These importers have to obtain a clearance certificate from the SLSI to sell their goods. SLSI accepts letters of conformity from foreign laboratories, but retains the discretion to take samples and perform tests. y The Ministry of Health has drawn up a draft law to regulate the import of GM food. Some large foreign food exporters have expressed concern about this proposed regulation, which is thought to be excessive and could hinder exports of US brands to Sri Lanka. y A new labeling and advertising regulation came into effect from April 01, 2004. New features of the latest regulations include the date of manufacture, the name or INS number of the food additives, claims that are allowed and disallowed, etc. y Poultry and meat: There is a temporary ban on all poultry imports due to fears of HPAI. Imports of beef from the United States are banned due 20 to fears of Bovine Spongiform Encephalopathy (BSE).
Customs Barriers
(contd)
y Import licenses are not required for any imports into Bangladesh. However, in addition to the standard LCA import procedure, a permit, clearance, prior permission or approval may be required for a number of imported products. Many of the clearance requirements for items on the restricted list are based on health or safety grounds and therefore seem to be "automatic" in nature. y Some categories of the restricted items can be imported only by the registered industrial consumers, including export-oriented ready-made garments; hosiery and specified textile industries operating under the bonded warehouse system; the pharmaceutical (allopathic) industries; and foreign exchange hotels. y Second-hand clothing is importable only by 3,000 commercial importers who are selected by an open lottery of quotas, which are distributed among different districts on the basis of population. The ceiling of Tk 50,000 is set for each importer, who may purchase, on the basis of prior permission from the CCIE. All consignments of second-hand clothing must also be accompanied by a certificate from a chamber of commerce of the exporting country certifying that the consignment does not contain any banned items. y An import permit or clearance permit is required from the CCIE in the following cases: (i) imports of books, magazines, journals, periodicals, and scientific and laboratory equipment; (ii) imports of free samples, advertising materials, and gift items above the prescribed ceiling; (iii) imports of drugs and medicines; and (iv) imports of capital machinery for joint-venture industrial units.
21
(contd)
Standards, testing, and certification y There are 1,612 standards in Bangladesh of which about 8% are compulsory. Testing and certification procedures for compulsory standards are the same for domestic and imported products. Bangladesh has notified the WTO of its acceptance of the Code of Good Practice of the WTO Agreement on Technical Barriers to Trade. y At present, some 36 Bangladeshi standards are identical to ISO standards, and another 15 are identical to IEC standards. Bangladesh has been a member of the ISO since 1974, but is not yet a member of the International Electrotechnical Commission (IEC). The internationally equivalent standards in Bangladesh are mostly voluntary. y The adoption of ISO 9000 and ISO 14000 certification is regarded as an essential instrument for the Bangladeshi exporters to market their products in foreign markets. So far, 25 companies have obtained ISO 9000 certificates and two companies have obtained ISO 14000 certificates. Some 12 companies have been awarded HACCP certificates. y At present, there is no laboratory accreditation scheme in Bangladesh. While there are no accredited Bangladeshi laboratories, there are some multinational companies operating in Bangladesh whose certificates are accepted in the country. y Bangladesh does not as yet participate any bilateral or mutual recognition agreements with its trading partners in the areas of standards, testing, and certification. However, the Government is currently promoting such initiatives with the SAARC countries; a MOU in the area of quality, standardization, and testing is to be signed between the Bureau of India Standards and the BSTI. 22
(contd)
Labeling and packaging y All imports are required to carry a label indicating the country of origin. The label must also indicate quantity, weight, measure, trade description, component materials, and date of manufacture/expiry. Bangla or English is permissible for labeling.
y For imports of food and beverages, the dates of manufacture and of expiry must be clearly printed. Marking of the ingredients and composition of milk food is required in Bangla. In addition, imports of milk food with fat content, and baby food must be in a tin container, and import of non-fat dried milk must be in a bag or tin. y For imports of pesticides and insecticides, labels must contain information on the manufacture and ingredients, as well as warning, antidote, and direction for use, in Bangla.
Sanitary and phytosanitary standards y Sanitary certificates and radioactivity test certificates are required for imports of food and edible products. A sanitary certificate issued by the competent authority of the exporting country must indicate that the specific product is free of injurious insects, pests, and diseases. The Bangladesh Atomic Energy Commission conducts radioactivity tests on samples upon the arrival of food items, and issues a clearance certificate for release of the items by the customs authority. Foreign certifications of radioactivity test are also accepted in Bangladesh. All expenses incurred for the tests are borne by importers. 23
(contd)
Anti-dumping, countervailing, and safeguard measures An application for an investigation, whether for an anti-dumping or countervailing measure, must be made in writing to the BTC by or on behalf of a domestic industry. Provisional anti-dumping or countervailing duties, not greater than the margin of dumping or of the subsidy rates, may be imposed within 60 days of initiation and applied for a period of six months, extendable by three months.
y Final measures may be taken for a period of five years from the date of imposition; however, the Government may renew the duty for a further period of five years, upon review, if it is believed that there would be continued injury. y Hitherto, there has been no investigation initiated on anti-dumping or countervailing measures in Bangladesh. A number of local producers have complained that trade liberalization in recent years has helped foreign suppliers to sell their products in Bangladesh. However, lack of technical expertise and financial resources both by the administration and industries, as well as lack of authenticated data essential for submission of application, have made difficult to initiate investigations. y A provision on safeguards was introduced in 1997 by amendments to Section 18 of the Customs Act, 1969. However, rules regarding imposition of safeguard measures have not yet been made. 24
(contd)
y Any entity or person, including non-nationals, may import goods commercially for a registered business activity or outlet to sell imports, provided that it has a general import license from the Ministry of Trade and Industries. y Since 25 May 2000, Customs has authorized registered users to access the customs declaration processing software system for processing forms online. This has enabled import (and export) documents to be submitted through electronic data interchange (EDI) or direct trader input (DTI). Some 85% of declarations from substantial importers are submitted electronically, either using EDI or floppy disc. y The Maldives Customs Service inspects imports for clearance after payment of duty. All single-item consignment goods and directdelivery cargo, such as river sand and cement, are released on a risk-assessed basis. About 25% to 30% of consignments of reliable parties judged on past importing history are physically inspected. y There are no preshipment inspection (PSI) requirements. The Maldives has commenced computerizing customs operations, and UNCTAD's ASYCUDA++ implemented during 2002, y The Maldives has post-entry audit arrangements and import declarations are checked after release. Importers must pay the duties in full on shipments subject to valuation disputes while seeking court relief. No system of security guarantees exists. 25
(contd)
y The Maldives became a member of the World Customs Organization in September 1995. While it is not a member of the ATA Carnet System, similar procedures and privileges are followed. The Maldives is considering joining this system. y The Maldives and other SAARC members have approved the Customs Action Plan to harmonize the application and simplification of customs procedures and practices. This is to be achieved through the progressive implementation of the Kyoto Convention on Customs Procedures and developing a coordinated and cooperative approach to customs, including adoption of standardized forms and simplified procedures. y According to the authorities, the new customs legislation due to be passed in 2003 will be consistent with the Kyoto Convention.
26
(contd)
Standards, testing, and certification y There are no known Maldivian standards, and no formal mechanism exists on standards. Australian, United Kingdom, and United States standards are sometimes required.
y The Maldives, along with other SAARC members, has agreed to a Regional Action Plan on Standards, Quality Control and Measurement aimed at identifying trade in products adversely affected by variations in national standards, and their harmonization, including the prospects of developing regional standards. y Efforts also include the promotion of mutual acceptability and recognition of certification schemes and accredited testing. Initial focus is on agricultural and food products, building materials and household electrical appliances.
Sanitary and phytosanitary (SPS) requirements y Imports of live animals, birds and plants require a phytosanitary or sanitary certificate. The Maldives is not a member of the FAO's Codex Alimentarius, OIE, or IPPC. Marking, labelling, and packaging y The Maldives has no special marking, labelling, or packaging requirements. 27
Transformers
Cosmetics
Mango pulp
Sanitary ware
Others
Other barriers
29
Whenever there are disturbances at the Indo-Pak border, the mobile connections are not operational. While road routes for trade between India and Pakistan are non-existent, rail and air connectivity between the two countries has been erratic. Pakistani consignment are subject to more stringent checking and detailed security checks in India (e.g. Pakistani Molasses is allowed in 1 ton packs only because of security reasons)
Stringent checking
Closure of land routes (Wagha, Khokrapar, and Ganda Singh Wala (near Kasur) is also seriously hampering trade with India There is higher port congestions, higher port and demurrage charges, more paper work, and generally more issues of trade and transport facilitation in Pakistan 30
Dye Cement
Potato
31
Bangladesh
Pharmaceutical products
Registration from Pakistan is very tough as they restricted import of Bangladeshi pharmaceuticals by law to that country. The BTC study (2003) noted that packaging requirements, phyto-sanitary measures, special certificate of origin, customs valuation, preshipment inspection requirements are restricting the export of jute yarn to India, Canada and other countries. Exporters face problems while exporting goods also to India. For example, lack of truck parking space, unavailability of customs officials in time etc. Visas can be obtained only for specific cities prior to entry into Pakistan.
Jute yarn
Visa Restrictions
32
Honey
Floriculture
Medicinal Plant
33
34
Source: Deb (2006), "Rules of Origin and Non-Tariff Barriers in Agricultural Trade: Perspectives from Bangladesh and Cambodia"
35
(contd) (contd
In 2004, 82 standards on safety and electromagnetic compatibility (EMC) were completed with another 24 standards for electrical and electronic equipment set for harmonisation before 2007. Currently, a survey is being conducted to identify more standards for harmonisation to support the integration of the eleven priority sectors. Member Countries have indicated their acceptance of test reports and/or product certifications under the ASEAN Sectoral Mutual Recognition Arrangement for Electrical and Electronic Equipment (ASEAN EE MRA). A regulated product that has been tested by a designated testing laboratory or certified by a designated certification body can enter and be marketed in the importing Member Country without being subject to further testing and certification. Four testing laboratories and one certification body have been designated to provide testing and certification services under the ASEAN EE MRA. Another five testing laboratories are undergoing verification processes for technical competence.
37
(contd) (contd
ASEAN Member Countries have also agreed to work towards the harmonisation of regulatory regimes in the electrical and electronics sector by 2010. ASEAN Member Countries made considerable progress in implementing the Agreement on the ASEAN Harmonised Cosmetic Regulatory Scheme. This agreement includes an MRA and the ASEAN Cosmetic Directive, which lays down the requirements for cosmetic products marketed in ASEAN. Seven Member Countries have indicated their readiness to implement the Directive on or before 2008. To support Member Countries to implement the Scheme, a series of technical documents, guidelines and training modules have been developed, especially in the areas of good manufacturing practice and post marketing surveillance.
38
(contd) (contd
ASEAN continued efforts to harmonise regulations in order to facilitate trade in pharmaceuticals. All Member Countries have indicated their readiness to implement the ASEAN Common Technical Dossiers (ACTD) and the ASEAN Common Technical Requirements (ACTR) on or before 31 December 2008. The ACTD is part of the marketing authorisation application dossier that is common to all ASEAN Member Countries while the ACTR is the set of written materials intended to guide applicants to prepare application dossiers in a way that is consistent with the expectations of all ASEAN Drug Regulatory Authorities. In addition, a series of guidelines for the implementation of the ACTR has been developed. ASEAN is also pursuing the harmonisation of labelling requirements for pharmaceuticals and is considering an MRA on Good Manufacturing Practice Inspection.
39
(contd) (contd
Concerning prepared foodstuffs, four areas were identified for the harmonisation of technical requirements. These are food labelling; the import export certification and registration procedure; food fortification and GMO; and Hazard Analysis and Critical Control Point (HACCP) and Good Manufacturing Practices (GMP) Inspection and Certification. This harmonisation of technical requirements will pave the way for future MRAs. An ASEAN Common Requirements for Prepared-Packaged Products was developed with the objective of eliminating technical barriers to trade associated with legal metrology regulations. A majority of Member Countries have indicated their readiness to implement the harmonised requirements by December 2008. Overall, substantive work was taken to facilitate the integration of the eleven priority sectors. This includes the adoption of action plans on standards, technical regulations and conformity assessments for medical devices, automotives, wood-based and rubber-based products, and traditional medicines and health supplements. A number of areas have been identified for the harmonisation of technical requirements and regulations in these sectors. (ASEAN Annual Report, 2005)
40
41
42