Non-Tariff Barriers
These are trade barriers that restrict imports or exports of
goods or services through mechanisms other than tariffs.
ORIGIN
 The birth and development as well as growth of the
spirit of protectionism within recent times.
 The increasing regulation of commerce and industry
through the use police power of the State.
EXAMPLES OF NON-TARIFF OBSTACLES
1. Marking of origin requirements
Section 303 of the Tariff and Customs Code of the
Philippines
• Every article of foreign origin imported into the
Philippines shall be marked in any official
language of the Philippines and in a conspicuous
place as legibly, indelibly and permanently as
the nature of the article will permit in such
manner as to indicate an ultimate purchaser in
the Philippines the name of the country of origin
of the article.
2. Plant regulation
Special Quarantine Order
The importation of plants, plant products and
other materials capable of harboring plant pests or which
may be a source of infection/infestation or a medium for
the introduction of noxious weeds are subject to certain
quarantine restrictions and shall not be removed or
transferred from the place of landing unless authorized
by the Plant Quarantine Officer assigned at the port of
entry. Such consignments shall promptly be subjected to
quarantine inspection or verification to determine their
phytosanitary condition.
Plants, Plant Products and Other Materials which a
“Permit to Import” is required.
The following materials, as a condition of their entry,
must be covered by a “Permit to Import” issued by the
Director of Plant Industry.
 Living plants
 Nursery stocks, including vegetative parts thereof
used as propagating materials
 Seeds and nuts for planting
 Fresh fruits, vegetables and other plant products
which have been declared as prohibited
 Pure cultures of fungi, bacteria, virus, nematode and
other phytopathogenic materials
 Mushroom cultures including spawn
 Algae cultures, rhizobial cultures as legume
inoculants
 Soil and plant material for isolation of organism
 Other plant cultures.
All plants, plant products and other materials found to be
substantially free from plant pests and verified to be
same materials applied for shall be released to the
importer or his authorized representatives, upon payment
of prescribed Plant Quarantine Fees and Charges.
Importations found infested or infected by plant
pests shall either be subjected to a prescribed commodity
treatment or returned to the country of origin or
destroyed at the Port of Entry and all fees, charges and
other expenses relative to such quarantine action shall be
borne by the importer.
All imported plants, plant products and other related
materials, including their packing or containers must be
free from soil, sand, earth and other similar materials
which could harbor “plant pests”. All plant roots,
rhizomes, tubers, etc. must be washed thoroughly to free
them from sand, soil, or earth, and must be so certified
by the duly authorized officer of the country of origin.
3. Safety Standard
Article 20 of the General Agreement on Tariffs and
Trade (GATT) allows governments to act on trade in
order to protect human, animal or plant life or health,
provided they do not discriminate or use this as
disguised protectionism.
Increased regulatory policy can be seen as the result of:
 higher standards of living worldwide
 consumers' demand for safe and high-quality products
 growing problems of water, air and soil pollution
which have encouraged modern societies to explore
environmentally-friendly products.
Reasons why manufacturers and exporters would be
discouraging:
 need to comply with different foreign technical
regulations and standards, it certainly involves
significant costs for producers and exporters
 costs arise from the translation of foreign regulations
 hiring of technical experts to explain foreign
regulations
 adjustment of production facilities to comply with the
requirements
The Technical Barriers to Trade Agreement (TBT)
tries to ensure that regulations, standards, testing and
certification procedures do not create unnecessary
obstacles.
Safety standard in the Philippines
 the Philippine Standard(PS) Certification Mark
 Import Commodity Clearance(ICC) Mark
3. Health Standards
Prompted by legitimate concern to protect the
consumer's health, governments have long laid down
regulations concerning the dyes, additives or
preservatives which may enter into the composition of
food products.
Examples:
1. France prohibits the importation of biscuits with even
slight traces of erythrosine, a coloring matter which
British manufactures.
4. Pharmaceutical Products
In most countries, the sale of pharmaceutical products is
subject to official control of government and new
products shall not execute in the market without the
sufficient tests and approved by the official body.
Although the rules are the same with the local imported
products, in case of medicines, the rule was being
applied as de facto discrimination which artificially
protects the local manufacturers and can even exclude
from foreign competition.
EXAMPLE:
• In the Philippines, no products can be imported
that contradicts with the law. Therefore,
importation of drug requires an intimate
restriction but in other countries, importation of
drugs is allowed as they use as pain killer.
5. Product Content Requirements
• The list of products whose international
marketing is hampered by the regulation as to
composition. Content requirements state that a
minimum percentage of a product must be
produced within the borders of a country in
order of that product to be sold in that country.
• Local content of a good is the portion of
production costs incurred locally. For example,
for a car to be sold in the Philippines must be
assembled there. Consequently, each of the
major car manufacturers that wants to sell cars
in the Philippines has an assembly plant there
even though demand for cars in that country is
sufficiently small to suggest that importing them
would be more economical. Local content
regulation is a nontax instrument forcing foreign
firms to use domestic inputs by carrying out
some activities domestically that perhaps could
be done profitably elsewhere.
6. Labelling and Container Regulations
Consumer Act of the Philippines (R.A. No. 7394) Where
the Philippine marking and labelling requirements are
specified. Department of Trade and Industry Bureau of
Philippine Standard is the national standard body that
develops and implements the Philippine National
Standard All consumer products sold domestically,
whether manufactured locally or imported must contain
the following information on their labels:
(a)Correct and registered trade name or brand name
(b)Registered trademark
(c)Registered business name and address of the
manufacturer, importer or repacke of the consumer
product in the Philippines
(d)General make or active ingredients
(e)Net quality of contents, in terms of weight
(f)Country of manufacture if imported
Labelling
• Labels carry the descriptive information about the
product
• Labels may range from simple tags attached to the
products to complex graphic that are part of the package.
Labels perform the following functions;
a. Identifies the product or brand,
b. Describes several things about the product — who
made it, when it was made, its content, and how to use it.
Product Identity or Name
•The name that should distinguish the product from other
products of the same type.
•Product name should not be misleading
Ingredients
•Any substance including the additives used in the
manufacture or preparation of a foodstuff and still
present in the finish product.
Listing of all ingredients or components of the product
in descending order of predominance by weight.
Net Content Declaration
•Expression of the weight, measure or numerical count
or a combination of numerical count and weight of the
product inside the package
•Examples
NET WEIGHT 500g
NET CONTENT 180 ml
NET WT. 2kg
Name and Address of Manufacturer, Packer or
Distributor, Country of Origin
•Examples:
Manufactured by:
Imported by:
Distributed by:
7. System of Licensing
•used to regulate the flow of imports over the quota
period as also to allocate them between various
importers and supplying countries. In this system a
license or a permit has to be obtained from the
Government to import the goods mentioning the quantity
and the country from which to import.
8. Consular Formalities and Documentation
Large number of countries demands that shipping
documents must accompany the consular documents
such as: Certificate of origin, Certified invoices, Import
certificates etc.
Sometimes, it is also insisted that such documents
should be drawn in the language of importing countries.
In case the documentation is faculty and is not drawn in
the language of the importing country heavy penalties
are imposed. Fees charged for such documentation are
quite heavy.
EXCHANGE CONTROL
It is a complete or partial regulations by the government
covering payment from one area into another. These
controls allow countries a greater degree of economic
stability by limiting the amount of exchange rate
volatility due to currency inflows/outflows
Non-deliverable forwards
These are usually executed because they break local
currency regulations that cannot be enforced outside the
country.
Examples:
China, Philippines, South Korea and Argentina

OBJECTIVES OF EXCHANGE CONTROL

1.Maintain Exchange Rate and Avoid Flight of Capital.
2. To Assure Imports of Essential Items.
3. To Stimulate or Discourage.
4. As a Source of Revenue