Law

International Trade Law

Agreement on Technical Barriers to Trade
Role Name Affiliation
Principal Investigator Dr. Ranbir Singh Vice Chancellor, National
Law University, Delhi
Co.P.I. Prof. Dr. G.S. Bajpai Registrar, NLU, Delhi
Paper Coordinator Dr. Saloni Khanderia-Yadav National Law University,
Delhi
Content Writer/Author Mr. Pratyush Kumar National Law University,
Delhi
Content Reviewer Prof. A. Jayagovind National Law University,
Delhi
Language Editor Dr. Saloni Khanderia-Yadav National Law University,
Delhi

Module XIX: TECHNICAL BARRIERS TO TRADE

DESCRIPTION OF MODULE

Items Description of Module

Subject Name Law
Paper Name International Trade Law
Module Name/Title Agreement on Technical Barriers to Trade
Module Id 20
Pre-requisites  Concept of Technical Barriers to Trade
 Regulations and Standards
 Conformity Assessment Procedures
Objectives To understand the following:

 What constitutes Technical Barriers to Trade

 What are technical regulations and standards
 What are conformity assessment procedures
 Objectives
 Harmonization
 Equivalence
 Transparency

Keywords sanitary, phytosanitary, health, conformity, tariff, non – tariff,

harmonization.

E-TEXT

Topics & Sub-Topics covered (Index)

1. Introduction
2. Objectives
3. Keywords
4. Preamble
5. (a) Technical regulations and standards
(b) Conformity assessment procedures
6. Objectives
7. Provisions
8. Harmonization
9. Equivalence
10. Transparency
11. Objective Type Questions
12. Useful Links
13. References

1.1 INTRODUCTION:
What is Technical Barriers to Trade (“TBT”)?
- With increase in standards of living and greater awareness and sensitivity to
environment fueling the demand for high – quality products by consumers worldwide
made it necessary to address the issue of product standards.

- TBT is an agreement under the aegis of World Trade Organization (“WTO”)

governing product standards which do not fall under the ambit of SPS agreement.

- Even though the TBT agreement concerns itself with health issues of human, animal
and plant life and health but it does the same through technical regulations,
standards and conformity assessment procedures.

- Through the Uruguay (1986 – 94) round TBT is an intrinsic part of WTO. Earlier it
was called the Standards Code and which emerged after a long and protracted Tokyo
Round of negotiations which finally reached culmination in 1979.

- The Most Favoured Nation (“MFN”) principle and National Treatment (“NT”)
principle are part of TBT as they are part of GATT and every agreement entered into
under the auspices of WTO. (Art. 2.1 includes aspects of both MFN as well as NT in
it.) MFN and NT apply to technical regulations as well as conformity assessment
procedures.

Article 2.1 Members shall ensure that in respect of technical

regulations, products imported from the territory of any Member
shall be accorded treatment no less favourable than that accorded to
like products of national origin and to like products originating in any
2.1 Objectives: To get an overview of TBT Agreement
other country.
3.1 Keywords:
4.1 The preamble to TBT sets the agenda for it as follows:
i. To further the objectives of GATT 1994;
 ii. To encourage the development of such international standards and
conformity assessment systems;
iii. To ensure that technical regulations and standards, including packaging,
marking and labeling requirements, and procedures for assessment of
conformity with technical regulations and standards do not create unnecessary
obstacles to international trade;

4.2 The TBT agreement does not apply to Sanitary and Phytosanitary Measures
Agreement (“SPS”) (Annex A of SPS Agreement).
4.3 If implemented with the intent to promote trade TBT measures are helpful.
Technical regulations and standards are necessary for:
i. Consumer information,
ii. Information for cross – border traders,
iii. Environmental protection,
iv. National security and the like.

4.4 Product standards developed under TBT could be:

a. Voluntary;
b. Mandatory;
c. Development of procedures to determine whether a particular product meets such
standards.

5.1 What are technical regulations and standards?

The size, shape, design, functions, performance, labeling and packaging of a product
before it is put on sale in a particular country are the components of technical
regulations and standards. While technical regulations are mandatory, standards
employed are voluntary.
Technical regulations would determine whether a particular product would be allowed
entry and sale in a particular market or not. Standards would determine consumer
behavior.
E.g. Technical regulations would determine whether a particular product contains cane
sugar or corn syrup as a sugaring agent in its labeling. Whereas standards would be,
using or not using cane or corn syrup as a sugaring agent to sweeten a particular
product depending on consumer behavior of a particular market as well as the health
5.2 What are conformity assessment procedures?
implications of cane sugar vs. corn syrup.
These are technical procedures like testing, verification, inspection and certification
confirming whether the products exported fulfills the regulations and standards of the
importing country. These conformity assessment procedures can act as the chicken –
neck to restrict trade. Therefore, these procedures need to be predictable, transparent
and non – discriminatory in order not to affect trade adversely.

Article 2.2
- Members shall ensure that technical regulations are not prepared, adopted or applied
with a view to or with the effect of creating unnecessary obstacles to international
trade.
- For this purpose, technical regulations shall not be more trade-restrictive than
necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment
would create.
- Such legitimate objectives are, inter alia: national security requirements; the
6.1 Objectives of TBT
a. Protection of human life and health: different regulations and standards protecting
human life and health.

Protection of animal and plant life or health

i. Sugar percentage and composition in different
food products (also ISO mark or these days
organic mark on eatables);
ii. Regulations for having statutory warning in
cigarettes for it being harmful for health;
b. Protection of environment iii. Automobile manufacturing companies to
mandatorily have seat – belts installed in their
cars;
Regulations and standards to protect animals and plant
species from extinction due to soil, air and water pollution

c. Prevention ofStandard
deceptive practices
of technology adopted by automobile industry to
reduce emission levels to reduce pollution; promoting
To avoidrecycling technology
any deceptive practice:
Labelling requirements of products
Classification and definition of products
Packaging requirements
Measurements (size, weight, shape etc.)

d. Other objectives

Quality (size of fruits and vegetables)

Technical harmonization (configurations,
telecommunications)
Trade facilitation

Global harmonization of standards is very important to facilitate and develop global

trade to its optimum. If standards are divergent costs of exporters would become very
high and they would also have to skip some of the markets where they would
otherwise have exported. Therefore, rules and standards need to transparent
predictable and informed well in advance. If rules are all divergent and if the Code of
Good Practice for the Preparation, Adoption and Application of Standards (TBT
Annex 3) is not followed it becomes specially debilitating for small and medium
enterprises. Small and medium enterprises not just provide maximum employment but
also lead to a more sustainable and environment friendly economic growths in
developing country like India.
Standards requirements vary from countries to countries depending on the levels of
income, levels of awareness of consumers, taste, geographical factors and the like.

Eg.
a. Countries with high level of salination in arable land and soil pollution or a higher
income developed country might restrict use of insecticide, pesticide and fertilizers.
b. Countries with high level of air pollution would restrict air polluting industries and
products or have higher norms and standards than other countries.

Therefore, TBT agreement allows room for difference in standards among

different countries but it should not be implemented just for unnecessary
restriction for trade.

Unnecessary obstacles to trade can result when

(i) when it does not fulfill a legitimate policy objective;
(ii) a regulation is more restrictive than necessary to achieve the policy objective
which could be achieved by a less restrictive regulation.
7.1 Provisions:
1. Article 2 concerns itself with Preparation, Adoption and Application of Technical
Regulations by Central Government Bodies.
2. Article 3 concerns itself with Preparation, Adoption and Application of Technical
Regulations by Local Government Bodies and Non-Governmental Bodies.
3. Article 4 concerns itself with Preparation, Adoption and Application of Standards.
4. Articles 5 to 9 concern itself with “Conformity with Technical Regulations and
Standards”.

Case : EUROPEAN COMMUNITIES –MEASURES AFFECTING ASBESTOS

AND ASBESTOS –CONTAINING PRODUCTS

Brief relevant facts:

The dispute concerned certain measures including Decree No. 96-
1133 of 24 December 1996, issued pursuant to the Labour Code and the Consumer
Code taken by France that banned asbestos and asbestos containing products from
entry into its market. According to the said Decree, import of anything containing
asbestos fibres was prohibited with the exception of certain existing materials
containing chrysotile fibre when there is no substitute available which is more health
and environment friendly than chrystolite fibre.
Claims of the Parties:
Canada claims inter alia that the measures adopted by France
are violative of Article 2.1, 2.2, 2.4 and 2.8 of the Agreement on Technical Barriers to
Trade (hereafter TBT).

Findings of the Panel:

First, the Panel discussed whether the impugned measures
constitute technical barriers to trade. Interpreting the definition of “Technical
Regulation" Annex 1.1 of the TBT Agreement, the Panel came to the conclusion that
“technical regulation as envisaged under the said definition means those documents
which characterize specific or generic products. But characterization is essential. And
because the impugned Decree wasn’t specifying any characteristics for the products
and was just banning them, hence, the panel concluded that the part of the decree
putting a blanket ban on all asbestos containing products is not a “Technical
Regulation”. However, the part of the Decree, which did characterize the products
that fell into the category of exceptions, constitutes a “technical regulation” within the
meaning of Annex 1.1 to the TBT Agreement.1

The Appellate Body Findings:

The Appellate Body, on the other hand, held that “the
proper legal character of the measure at issue cannot be determined unless the
measure is examined as a whole”2 and reversed the Panel’s two-stage interpretation.
They were of the view that the Decree does prescribe characteristics for products that
might contain asbestos fibres in it; the characteristics being the absence of asbestos
fibres in them.3 Hence, the Decree, they hold constitutes a “technical regulation”.4

Article 5 requires:

1 Paras 8.34-8.73
2 Appellate Body Report, Para 64
3 Ibid, Para 74
4 Ibid, Para 75
  conformity assessment procedures by governmental bodies should be non-
discriminatory for like products (MFN and NT principles);
 conformity assessment procedures shall not be more strict or be applied more
strictly than necessary;
 necessary to assess conformity and determine fees;
 confidentiality is respected in the same way (NT);
 a complaints and corrective action procedure should exist; and
 international harmonization is sought for

Article 6 requires:

- Members shall accept conformity assessment procedures in other member

countries (NT);
- There should be level of equivalence;
- Prior consultations;
- May be necessary to assess technical competence of the relevant conformity
assessment bodies and agree on limitations of the acceptance of the conformity
assessment results of those produced by designated bodies in the exporting
member country.

Articles 8 and 9 require:

- NGOs and international systems within a member country comply with Articles
5 and 6.
- Central government bodies of member countries should rely on NGOs and
international systems only if those bodies and NGOs comply with Articles 5 and
6.
- NGOs are exempt from the obligation to notify proposed conformity assessment
procedures.

5. Articles 10 to 12 concern itself with information and assistance.

6. Articles 13 and 14 concern itself with institutions, consultation and dispute settlement

8.1 Harmonization
- Technical harmonization is required for greater consumer welfare. Eg. Countries with
left – hand driving and those with right – hand driving have to have vehicles with
right – hand steering and left- hand steering respectively and all automobiles have to
comply with this regulation. The regulation varies from country to country.
Something as simple as this involves huge adjustments for automobile industries,
affecting their import and export as well.
- Participation in international standardizing bodies would further the cause of
harmonization of standards among member countries.
 - Special and differential treatment is given to developing country members to conform
to different sets of standards and assistance is provided to develop their own
standards. (Article 12).

9.1 Equivalence
Harmonization would take years to be negotiated. Till the time a universal
harmonization of standards is achieved equivalence is used to eliminate technical
barriers to trade. If two technical standards are different but they reach the same
conclusion and the same policy objectives are achieved by it then it cannot be a
reason to impose technical barriers as it leads to equivalence.
Under article 11 of TBT agreement technical assistance is provided to developing
country members for:
i. preparation of technical regulations
ii. establishment of national standardizing bodies to the participation in international
standardizing bodies
iii. Steps to be taken by developing country Members to gain access to regional
international conformity assessment systems.
iv. Helping firms in developing country members to manufacture products in
accordance with the technical requirements existing in an importing country to
ensure its acceptance and create a market for it.

10.1 Transparency is required in

- Technical regulations and conformity assessment procedures

- Statements on the implementation and administration of the Agreement

- Bilateral or plurilateral agreements

- Implementation of Code of Good Practice

- Enquiry points

- Existence of a TBT committee

CODE OF GOOD PRACTICE

The Code of Good Practice is contained in Annex 3 of the WTO
TBT Agreement.
It provides rules related to
a. Transparency;
b. For the preparation, adoption and application of standards by
all central governmental, local government, non-governmental
and regional standardizing bodies.
 CASE : EUROPEAN COMMUNITIES – PROTECTION OF TRADEMARKS
AND GEOGRAPHICAL INDICATIONS FOR AGRICULTURAL PRODUCTS
AND FOODSTUFFS
Brief facts:
A certain regulation5 in the European union required all products using
a GI to comply with certain product specifications. The issue of the dispute, inter alia
were that these regulations were allegedly trade restrictive.

Claims by the Parties:

Australia claimed that the impugned Regulation puts in place
certain inspection structures that are inconsistent with Article 2.2 of the TBT
Agreement. It also claimed that the Regulation is a "technical regulation" within the
definition in Annex 1.1 of the TBT Agreement because it requires that GI products
comply with the product characteristics in the GI registration. They claim that the
process of checking compliance with the specifications is a regular sequence of
actions, i.e. a process, and falls within the meaning of "product characteristics or their
related processes".6 On the other hand, the European Communities claim that none of
these provisions fall within the meaning of a “technical regulation” defined in the
TBT Agreement.7
Findings of the Panel:
The Panel succinctly discusses the meaning of the word
“process” to mean a series of instructions or steps undertaken towards a common end 8
and “conformity assessment procedures” to mean procedure used to determine that
relevant requirements in technical regulations are fulfilled.
Coming to the question of whether the impugned process in the Regulation qualifies
as a “Technical Requirement”, the Panel noted that the TBT Agreement comprises of
two main parts: Articles 2 to 4 relate to technical regulations and Articles 5 to 9 relate

5 Council Regulation (EEC) No. 2081/92 of 14 July 1992

6 European communities – protection of trademarks and geographical indications for agricultural
products and foodstuffs, Report of the Panel, Para 7.492, 7.493
7 Ibid, Para 7.500
8 Ibid, Para 7.510
to conformity assessment procedures. So, if Australia’s claims were to be accepted,
then, it would embed measures subject to Articles 5 to 9 into Articles 2 to 4 (in other
words, “Technical Requirements”). And the result would be unreasonable. 9 Hence,
the Panel concludes that the Regulations do not constitute “Technical Regulation”
within the meaning of Article 2.2 of the TBT Agreement.

9 Ibid, Para 7.6513