No pain, no gain
FEB 17 -
Nepali exporters often complain about non-tariff barriers (NTBs) as being an enormous challenge to entering foreign markets, mainly in the rich countries. We frequently hear that our exports are being affected by such barriers, leading to a loss of markets for highly potential exportable products like honey, herbs and tea. Besides these products which have to pass health and safety tests to enter international markets, our well-known exports such as carpets, crafts and clothing are also not free from NTBs.
These obstacles impact our foreign trade on two fronts. The first is procedural complications requiring tough standard tests which are not easily available in the country or are mostly beyond our reach. The second is the confusion created by the differences between national policies related to such obligations. They force our exporters to spend extra time and money thus further weakening their feeble competitiveness. In some instances, they have had to sacrifice their marketing opportunities as a result.
So why are Nepali exporters unable to handle the oft-repeated problem of NTBs? There are two reasons for this. While it is necessary to examine why NTBs have gained greater importance in international trade presently, it is also important to study whether our exporters have done anything to deal with them.
As natural trade barriers and international tariff rates have come down, NTBs have gained importance to a greater extent. New challenges in the international trading system have emerged following a transformation in their features. NTBs in the form of sanitary and phytosanitary standards (SPS) and technical barriers to trade (TBT) have replaced traditional measures like quotas and foreign exchange controls. NTBs are being increasingly used to address concerns about health and safety regulations. Additionally, environmental, social and labour standards are becoming common and stricter globally. And these concerns have gained prominence in the public policies in many countries, particularly in the rich countries, as they are growing economically and their incomes are rising consistently.
It is crucial to realize that the issue of NTBs is not confined to the exports of the poor countries. Trade between the rich countries too is not totally free from these problems. One of the telling examples is the US-Japan dispute over fruit trade during the 1980s. Japan blocked the import of American apples claiming that they might contain parasites. It took the US almost 20 years to get Japan to import their apples again. The Japanese relented only after the World Trade Organization (WTO) ruled in 1997 that the fruits were safe for export. Even while SPS and TBT are so widespread, there are also consumer-driven standards as conditions for market access to many rich countries. Although voluntary in nature, these constitute another challenge to exporters in the poor countries as they are more stringent than the government regulations. And virtually no mechanism is in force to regulate these privately imposed standards.
Considering the trend of NTBs in global trade, our exporters should understand that these measures will exist in any form or through any source. At the same time, ways to diminish the hardships are not lacking. The WTO, if not regional agreements, has addressed transparency in SPS and TBT issues in particular. If the provisions are not adequate or inappropriate, there are international norms or standards that exporters can turn to. So our exporters need to keep abreast of the existing provisions and have convenient access to information on international standards and certifications. This is not possible without establishing an appropriate infrastructure for conformity assessment in the country.
Unfortunately, our exporters are still mired in the problem of standardization, quality assurance and accreditation systems in the country. Besides these points, they should also have the capacity to challenge contingencies if they suffer a great impact from them. Many developing countries have achieved successes in this regard. One example worth mentioning here is a joint appeal made to the WTO by several Asian countries against the US law banning the import of shrimp caught in encirclement nets to protect sea turtles. The WTO ruled that the US law discriminated against their shrimp exports and termed it unlawful to the great delight of Asian shrimp exporters.
Do our exporters have the ability to fight for their interests in this way? Have Nepali business associations been dedicated to training, educating and disseminating information about compliance with international standards and certification to our exporters? There is no sense in repeating the same complaints about NTBs without showing a serious commitment to these obligations. Whatever the developments made in multilateral and regional trade forums, compliance with international standards and certifications will prevail due to the growing demand of consumers in the developed and developing countries. Compliance with these requirements can be a source of competitive advantage to our exporters provided they are committed to them without prejudice.
Shakya is involved in trade-related national and international trade programme, and specializes in the trade interests of Nepal and the LDCs.
Source: The Kathmandu Post
