UNCTAD14: Global Non-Tariff Measures Database Launched; Calls For Strengthened UNCTAD Heard

NAIROBI, Kenya (IP-Watch) — A global database on non-tariff measures (NTMs) has been launched here at the 14th United Nations Conference on Trade and Development (UNCTAD 14). Also this week, the World Investment Forum kicked off, the first such event since agreement of the UN Sustainable Development Goals. 

The database – seen as important for trade across the world – comes amid concerns that regulation standards were posing barriers to trade, since some were proving difficult to implement. It might be said that issues of intellectual property rights are not far on the horizon in this discussion.

The TRAINS-NTMs database was unveiled during a ministerial roundtable titled, “Lowering hurdles for trade: Trade costs, regulatory convergence and regional integration.” The roundtable explored what can be done to decrease the trade cost impact of domestic regulation.

The core focus of the session was on lowering trade hurdles.

“The common understanding was that tariff liberalization alone has generally proven unsuccessful in providing genuine market access drawing further attention to non-tariff measures (NTMs) as major determinants in restricting market access,” Amina Mohammed, Kenya’s Cabinet Secretary for Foreign Affairs and UNCTAD 14 president, told a news conference today.

The single database aims to lower trade costs and contains statistics on 56 countries, covering 80 per cent of the world trade.

On Tuesday, UNCTAD published a report, which indicated that developing countries were losing an estimated $23 million per year, equal to 10 per cent of their export to the Group of 20 (G20) through failure to comply with the groups’ non-tariff measures.

Tariffs have fallen to an historic low, according to UNCTAD, but non-tariff measures have replaced them as key barriers to faster global trade growth. The expansion of the middle class in many countries is expected to increase the demand for safer, cleaner products and this may push government to introduce more non-tariff measures.

“These measures are becoming increasingly widespread,” said Joakim Reiter, UNCTAD’s deputy general secretary. “Such measures disproportionately increase trade costs for small and medium sized enterprises and developing countries, particularly the least developed.

Reiter estimated that the impact of the European Union’s sanitary and phytosanitary measures comes to a loss of about $3 billion for low income country exports.

Before the session, background information noted that trade policies could be aligned with sustainable development objectives through the inclusion of simplified and enhanced transparent regulatory procedures could help compliance and extend the productive capacity of firms.

The full house that attended the session amplified the significance of the subject. At the same time, it was expressed that the database contribute to developing acceptable standards. It provides comprehensive and systematic information on a broad range of policy instruments that can have an effect on international trade in goods. The information includes traditional trade policy instruments, such as quotas or price controls.

It also lists regulatory and technical measures that stem from important non-trade objectives related to health and environmental protection (Sanitary and Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT)). Its objective is to increase transparency and understanding about trade regulations and trade control measures. It a joint effort by UNCTAD, African Development Bank (AfDB), Economic Research Institute for Asian and East Asia (ERIA) , International Trade Centre (ITC), World Bank and World Trade Organization.

“The database will improve countries’ ability to understand regulatory requirement, helping them to comply more easily and at less cost,” said Guillermo Valles, director of the division on international Trade in Goods and Services, and Commodities.

“This database is exactly what the private sector needs,” noted Robert Acle, the president of the Uruguay Chamber of Commerce.

Still, domestic regulations made to ensure the safety of products and production processes are being seen as hurdles for international trade.

“The standards can pose a barrier to trade, if they are difficult to implement. They should be an enabler to trade,” said Palu Dhanani, director, Universal Corporation, a pharmaceutical company in Kenya. He highlighted this as a key challenge, since countries in Africa do not recognise the NTMs of each other.

More of the standards will emerge, noted Rita Teaotia, secretary of commerce in the India’s Ministry Commerce and Industry.

“The challenge is to differentiate what is legitimate NTM and what is not,” said Teaotia.

World Investment Forum

The World Investment Forum (WIF) kicked off this week. This is the first major international meeting on financing of the SDGs, since the UN summit on the post-2015 development agenda and the COP21, the meeting on climate change.

“WIF seeks to tackle the future financing challenges facing the implementation of SDGs,” Amina Mohammed, Kenya’s cabinet secretary for foreign affairs and the conference president, told journalists at the daily news briefing.

According to the secretary, the forum convenes states, business and thought leaders, who share the latest thinking and options for financing the SDGs.

“Particular emphasis will be given to the corporate perspective on the role of private sector finance and initiatives,” said Amina.

The forum is expected to influence the debate on investment for sustainable development in the international community and offer a vision to national governments, financial institutions and the business community on how to direct investments towards important SDGs sectors.

“The WIF is therefore critical as we look at scaling up investments in the SDG sectors as well as facilitating investments for structurally weak and vulnerable groups,” said Amina.

Top-level negotiations are underway and two instruments – a political declaration named “The Nairobi Azimio” is being discussed for adoption. There is also the text, likely to be named “The Nairobi Consensus”, which is also being negotiated.

Since the start of the conference, top officials have called for strengthening of UNCTAD so that it can play a critical role in development through trade.

On 17 July, Kenyan President Uhuru Kenyatta called for the bolstering of the agency so that it can play a bigger role.

“The huge responsibilities with which we members entrusted UNCTAD in 1964 are more relevant today than before. Let our commitment to this organisation grow rather than diminish,” said Kenyatta.

This position is supported the G77 and China, according to a statement by South Centre.

“In view of the continuing impact of the global financial crisis and the various 2015 outcomes, UNCTAD should be strengthened more than ever. Providing UNCTAD with a strong mandate is the starting point and an essential requirement for strengthening UNCTAD,” said a statement attributed to Martin Khor, executive director, South Centre, and on the ministerial meeting of the Group of 77 and China during UNCTAD XIV.

 

Image Credits: Fredrick Nzwili