Addressing Non-Tariff Barriers to Trade in South Asia: The ...sawtee.org/presentations/Mustafiz_Rahman.pdf · Professor Mustafizur Rahman Executive Director, CPD Addressing Non-Tariff

12/28/2010

CPD: TPA Workshop 2006 1

PMR: Addressing NTBs to Trade in South Asia: The Next Challenge 111

Presentation by

Professor Mustafizur RahmanExecutive Director, CPD

Addressing Non-Tariff Barriers to Trade in

South Asia: The Next Challenge

Kathmandu, 17-19 December 2010

Regional Economic Integration, Climate Change and Food Security Agenda for the Decade 2011-2020

Organised by

South Asia Watch on Trade, Economics & Environment (SAWTEE) and South Asia Centre for Policy Studies (SACEPS)


Contents

Introductory Comments

Section I: Non-Tariff Barriers: Conceptual Issues and Definition

Section II: Non-Tariff Barriers in SAARC

Section III: NTBs as reported by SAARC Member Countries and Related Responses

Section IV: Dispute Settlement Mechanism to Deal with NTBs in Various RTAs

Section V: Policy Recommendations to Deal with NTBs in SAARC

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PMR: Addressing NTBs to Trade in South Asia: The Next Challenge

Globally, the experience has been that it is the non-tariff issues which are

emerging as major barriers to trade in goods and services across borders

With MFN tariffs coming down, NTBs are becoming increasingly important

from the perspective of advancing trade cooperation among SAARC countries

Whilst SAFTA has made some headway in moving towards duty-free access for

tradable goods, NTB issues have tended to remain relatively less-addressed

within the context of the SAARC

If regional cooperation is to be deepened through vertical integration and

promoting cross border supply-chains, NTBs in SA will need to be addressed

adequately with due importance

NTBs pose the next major challenges from the perspective of strengthened

regional economic and trade cooperation in South Asia

3

Introductory Comments: Growing importance of the need to address NTBs in South Asia


• Non-tariff barriers and measures (NTBs) include measures other than border

tariffs that affect trade in goods, services, and factors of production

• Taxonomies of NTBs include both narrow and broad categories

Section I: Non-Tariff Barriers: Conceptual Issues and Definition

Definition

According to the UNCTAD, classification of NTBs falls into six broad categories:

• Price control measures: Para-tariffs, surcharges etc.

• Finance measures: Regulate access to and the cost of foreign exchange for imports, define the

terms of payment.

• Automatic licensing measure: Restrain the quantity of imports of any particular good

• Monopolistic measure

• Technical measure: Measures referring to product characteristics such as quality, safety or

dimensions, including the applicable administrative provisions, terminology, symbols, testing

and test methods, packaging, marking and labeling requirements as they apply to a specific

product

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Imp

ort

measu

res

Sanitary and phytosanitary measures (SPS)

Technical barriers to trade (TBT)

Pre-shipment inspection and other formalities

Price control measures

Licenses, quotas, prohibition & other quantity control measures

Charges, taxes and other para-tariff measures

Finance measures

Anti-competitive measures

Trade-related investment measures

Distribution restrictions

Restrictions on post-sales services

Subsidies (excluding export subsidies)

Government procurement restrictions

Intellectual property (IP)

Rules of origin (RoO)

Technical

measures

Non-

technical

measures

Export

measures Export-related measures (including export subsidies)

Classification of Non-Tariff Measures

Source: ITC: Non-Tariff Measures Programme, Colombo, Sri Lanka


• SAARC countries have in place several ad hoc restrictions and NTBs on imports.

The general consensus is that the SAFTA Agreement has not been able to address

the NTB issues with due diligence

Non-Tariff Measures Share

SPS, TBT, and Other Related Measures 86.3

Tariff Quota 9.8

Anti-Dumping Measures 7.4

License Requirement 5.3

Countervailing Measures 1.2

Percentage Share of Specific NTBs to all NTBs in SAARC

Source: Quantification of South Asian Trade Benefits (ADB,2008)

Types of NTBs in South Asia

Section II: Non-Tariff Barriers in SAARC

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Trade Facilitation as NTB: An Emerging Concern

In view of the recent developments in promoting connectivity-added

importance

•Lack of Border Infrastructure and Traffic Planning: Traffic congestion and

delays in handling the shipments

•Land Ports at the Border: The storage dwell times has been increasing and

the port storage is grossly inadequate. For example, at the Petrapole-

Benapole border, it takes longer time to unload vehicles into the land

port than the physical clearance time

•Lack of Cross-Border Transport Agreements: Due to lack of through-

transport movement, formidable transport inefficiencies exist at the

interface

7


Results of CGE modelling exercises support the hypothesis that long

delays to cross the borders restrict LDCs’ potential for diversifying

exports and more importantly, it limits their potential to participate in

some of the most dynamic sectors of the economy.

Some studies found (Minor P. & M. Tsigas 2008) a 50% reduction in

time of export can generate benefits equivalent to 4% GDP of SA-LDCs

and SSA-LDCs.

50% reduction in time to import: SA 0.4% of GDP; SSA 3.8% of

GDP

8

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Indicators Duration (days) Cost (US$)

Nature of export procedures Bangladesh Thailand Bangladesh Thailand

Documents preparation 14 8 290 270

Customs clearance and technical control 3 1 120 50

Ports and terminal handling 5 3 420 58

Inland transportation and handling 3 2 140 220

Total for all 25 14 970 625

Nature of import procedures

Documents preparation 20 8 455 300

Customs clearance and technical control 3 2 135 75

Ports and terminal handling 4 2 585 200

Inland transportation and handling 2 1 200 220

Total for all 32 13 1375 795

Trade facilitation and trade related infrastructure remains weak

Bangladesh’s performance in trading across border vis-à-vis Thailand

Source: World Bank (2010)

9


BPA of Exports of RMG to India (By sea)

Source: Hossain (2010)

Note: For an export order equivalent to USD 50 thousand and exporting by a 20 ft.

container.

10

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The SAFTA Agreement stipulates formation of CoE to deal with NTB issues. The

work of the CoE is carried out in the following manner:

• The Contracting States notifies the SAARC Secretariat of all non-tariff and

para-tariff measures imposed on their exports on an annual basis

• The measures are then reviewed by the CoE, established under Article 10, in

its regular meetings, to examine their compatibility with relevant WTO

provisions

• The CoE then recommends the elimination or implementation of the measure

in the least trade restrictive manner in order to facilitate intra-SAARC trade

• As of now, four sub-group meetings on non-tariff barriers have taken place;

member countries have submitted their complains; responding countries have

given their responses; a majority of notifications and complaints are being dealt

through bilateral negotiations

• Last meeting of the CoE was held in October, 2009. Next meeting was

scheduled to be held in six months. Not held as yet.11

NTBs Reported at the Committee of Experts’ (CoE ) Meetings

Section III: NTBs as Reported by SAARC Member Countries and

Related Responses


4th SAFTA Sub-Group Meeting of the CoE held in Kathmandu

Notification and Responses with regards to Non-Tariff and Para-Tariff Measures

12

Type of NTB Response from Bangladesh

Ban on import (poultry related products) To protect human and animal/health. In view of recent partial spread of

Avian Influenza, Bangladesh needs to continue such measures.

Same name registration of drug in a developed

country (drugs)

Registration and Free Sale Certificate (FSC) duly signed in original by

the Health Authority of the country of origin and at least one FSC from

a developed country.

15% VAT (all goods) 15% VAT is also imposed on domestic products. Therefore, imposition of

VAT should not be treated as para-tariff.

Non-issue of khamarbari Certificate (Potatoes) Potatoes are not importable into by any means from any country; where

three serious pests, namely Black wart, Golden nematode and potato

beetle, unless they are accompanied by Phytosanitary Certificate from

the country of origin.

Allowed through land route only (Yarn) This measure is not applicable for a specific country. The provision has

been relaxed for yarn imported under back-to-back LC through land

customs.

GSP certificates (Fabric) At present, the EU is considering the revision of Rules of Origin of GSP.

Therefore, the EU GSP scheme should be considered at large.

Exporting Country: India

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13


Non acceptance of cargo by road/rail/rover

routes (all goods)

Currently, necessary equipments and physical infrastructure are not available

to handle containerized cargoes. Thus, containerized cargoes via land, river

and rail routes are not permitted.

L/C requirement (all products) Bangladesh Bank feels that this instruction is necessary to ensure entry of

imported materials/goods into the country against paid money and this has

not been applied as a non-tariff barrier.

Radioactivity test (directly consumable

stuff)

All imports of food items require radioactivity test report. However,

radioactivity test requirement has been relaxed for SAARC countries.

PSI certificate Any exporter from any part of North East India can get the service of the

PSI office in Shilong within 24 hours. Moreover, it must be noted that most of

the products exported to Bangladesh from North East India are non-PSI

items

Non-payment of irrevocable L/Cs by

various banks in (all exports)

The issue is being addressed by a joint group on Banking sector.

Reluctance to open new trade routes and

certain notified Land Customs Stations

Teghamukh and Ramgarh are situated in remote areas where traveling and

communication is very difficult. Besides, there are 4/5 land customs stations

close to these places, which can cover the trade with Mizoram.

Exporting Country: India (Contd)



14

Type of NTB Response from Pakistan

All products in positive list The bilateral trade between both the countries is to be viewed in the

political relations since independence. The positive list has increased from 42

to over 1800 tariff lines. 302 new tariff lines were added to the list.

Certain items allowed to be imported only

for limited periods from India (Corrugated

galvanized iron sheets, blankets)

These items were allowed from for the specific purpose of providing relief

and rehabilitation to earthquake victims in the northern areas of Pakistan.

Indian films are not allowed to be screened

in theatres.

It is a bilateral issue, which may be addressed in the relevant forums, e.g. in

Ministry of Culture.

No transit facilities offered for exports

from India to Afghanistan through land

border.

Transit of goods to Afghanistan is an issue relating to Pakistan-Afghanistan

bilateral Transit Trade Agreement. India has no bilateral Transit Trade

Agreement with Pakistan and cannot claim benefits from the Pakistan-

Afghanistan agreement.

Restrictions on items to be imported from

India through the Attari LSC (Wagah

Border) by road only.

Wagah Border has remained closed for all trade by road for over 40 years.

Hardly, any restrictions on imports from India by train has been placed. The

opening of the land route has been relaxed now for the first time since 1965.

Cotton is allowed to be imported only

through port and not by rail/road.

The quarantine arrangement in other ports is inadequate.

Exporting Country: India

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15


Inadequate handling capacity at Lahore

Land Customs Station (Lahore LCS).

Lahore LCS is in the process of upgradation its infrastructure facilities to handle

increasing volumes of trade

Commercial invoice and packing list

must be accompanied with the

consignment.

This measure is necessary to safeguard government revenue and streamline the

clearance of goods

Anti-dumping duty has been levied on

import of phthalic anhydride from India.

The measure is in line with WTO Agreement on Anti-dumping to protect local

industry

In many cases Pakistani banks do not

accept L/Cs issued by Indian banks.

This issue is under consideration in the bilateral dialogue. Understanding has

been reached to open bank branches across borders with India

Clearing through Asian Clearing Union is

mandatory for all members of Asian

Clearing Union.

State Bank of Pakistan has been requested to clarify this point

Pakistan Standards and Quality

Authority (PSQCA) is currently

maintaining 15 thousand standards.

PSPQA developed/adopted 4900 standards in accordance with ISO guide 21 and

are also in line with CODEX Alimentarius Guidelines.




16


Under PSPQA Act-VI of 1996,

compulsory standards and licenses are

required for 46 items for local

manufacturing.

PSPQA provides one window services for standards and conformity assessment.

All mandatory standards are in line with CODEX Alimentarius Guidelines.

In case of non-compliance with

specifications given by the importer,

consignments are not returned or

returned only after several months

(pharmaceuticals).

The exporter/importer should comply with the specific issue prescribed by the

Ministry of Health. The delay can occur in such cases where litigation is involved.

Pakistan is prepared to examine the relevant issues on case to case basis.

In addition to customs duty, customs

imposes a sale tax of up to 15% and a

withholding tax of up to 6% (on selected

products).

Sales tax @ 15% is levied on imported as well as local supply of goods at a

uniform rate. It is a value added, multi-stage levy on value addition at each stage.

In addition to a sales tax, a federal excise

duty is imposed on selected products.

All imported goods are not subject to with-holding tax @ 6%. The rates vary

from 1 to 6% and adjustable as final tax liability as per national rules.

Customs has levied an upfront stage

sales tax on 30% value addition on

import of pesticides.

The notification quoted has been superseded. VAT is being collected in lieu of

the levy at wholesale and retail stages.


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17


Pre-shipment Inspection (all products) Appropriate authority in Bangladesh has already advised the PSI Company to open

facilities in Pakistan.

One Free Sales Certificate (FSC) from

two developed countries

(pharmaceuticals) as eligibility to

import from Pakistan

Registration and Free Sale Certificate (FSC) duly signed in original by the Health

Authority of the country of origin and at least one FSC from one developed

country.

Radiation free certificate

(food products)

All imports of food items require radioactivity test report. However, radioactivity

test requirement is more relaxed for SAARC countries.

High incidence of para-tariff makes

applicable taxes above 100% (fruits,

consumables, garments, shoes etc.)

At present, supplementary duties (SD) are imposed on a number of products.

However, Bangladesh is gradually reducing the SD.

Rules against establishment of Central

Bonded –warehouses (all products)

The relevant rules do not prohibit establishment of central bonded warehouse. In

order to ensure rapid delivery of raw materials the relevant authority has

undertaken the following measures: private Container Depot in Chittagong; items

have been allowed for delivery in private premises and delivery farm hook point;

and import allowed without BBLC

Imports only against L/C. Imports can be made against L/C as well as without opening of L/C in certain

cases.

Exporting Country: Pakistan



Exporting Country: PakistanType of NTB Response from India

No single official publication covering all information on

trade regulations (all products)

Department of Commerce will prepare compendium on

import policy and procedure to facilitate the procedure.

Separate tariffs and Federal excise duty (all products) The proposed compendium on import policy and procedure

will simplify the current tariffs and taxes on imports

Each Indian state has its own rules on inter-state movement.

Goods are subject further inspection and even taxes/fees

(all products).

Each state has prescribed rules of interstate movement of

goods which applicable to both domestic and imported

goods.

Indian banks often do not accept LCs issued by Pakistani

banks (all products)

This is an operational matter. GoI has not issued any

guidelines to the banks regarding non acceptance of LSs

issued by Pakistani banks.

License from Bureau of Indian Standards cement, gelatin,

condensed milk, electrical appliances, mineral water, steel

products, leather products, x-ray equipments, dry cell

battery, thermometers,, helmets and gas cylinders)

The following steps have been taken: 1) number of items for

which certification is needed has been reduced from 109 to

68, 2) marking fees for BIS license has been reduced for

SAARC countries, and 3) processing charge for SAARC

countries has been abolished.

Anti-dumping measures (all products) India has not initiated any ant-dumping measures against

Pakistan.

Bio-security and sanitary requirement (agricultural

products)

Requirement has been set as per Articles 2 of the

Agreement on Sanitary and Phytosanitary Measures (SPS)

under WTO.


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Response yet to be Received from India (Contd.)

Type of NTB Response from India

Testing requirement by the Port Health Officer. At places

where PHOs are not available, valuable time is lost (food

products)

As per Section 5&6 of the Prevention of Food

Adulteration Act 1954. No food item can be imported

into India without license. Total number of laboratories for

testing has been increased from 4 to 32.

“Sensitive items” can only be imported from specified

ports and land customs stations (products considered

„sensitive by India‟

To ensure consumer safety this restrictions have been

imposed on 4 products; areca nuts, metal scrap,

automobiles and second-hand defective steel.

A 100% check is done on all food products (food

products)

The list of items where 100% testing is required has been

reduced to 14. Samples will be taken for high risk and

perishable items like fruits, meat and vegetables.

Import Permit from Dept. of Animal Husbandry a& Dairy

(poultry, dairy and meat)

Requirement is WTO compliant and as per the SPS

Agreement.

Compliance of Food Adulteration Act regarding shelf life

of goods (processed food products)

Compliance of shelf life is mandatory for all processed

food item but determination is not arbitrary. It is based on

PFA Rules 1955.

Laboratory testing (leather and melamine goods) The following steps have been taken; 1) mandatory license

is required only for safety boots and shoes for minors, 2)

license for safety boots and shoes for minors can be

obtained from BIS, and 3) every consignment is not

required to be checked by BIS.

Exporting Country: Pakistan (Contd.)


Notification and Responses with regards to Non-Tariff and Para-Tariff MeasuresExporting Country: Pakistan (Contd.)


No Certificate of Testing from country of origin is

accepted and test results cannot be challenged (pre-

packaged products)

These are statutory requirement under the Consumer

Protection Act.

Pre-shipment inspection certificate and extensive testing

requirement (textile products)

The provisions are also in effect for domestic industries.

Certificate from brand owners than the product is

genuine (woolen textiles)

Certificate is required to guarantee the use of 100% pure

wool content and international quality standard.

Requirement of registration of drugs with the Central

Drug Standard Control Organization (pharmaceutical

products)

No import license is required for import of

pharmaceuticals. All import of bulk drugs are set as per

the EXIM policy 2004-2009.

New vehicles can only be imported through three ports.

Second hand vehicles must have 5 years‟ road worthiness.

Importer must have a certificate from a testing agency

(automotive vehicles)

The regulations are aimed at ensuring road safety and

prescribed emission standards.

DGTF notification on labeling (consumer goods in retail

packaging)

The DGFT notification on labeling and marking rules are

applicable to all exporters to India on MFN basis and they

are in accordance with national treatment.

Special labeling of country of origin (jute bags/sacks) The rationale is that if there is any irregularity in the

quality of the imported item, the source could be tracked.

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Exporting Country: Pakistan (Contd.)


Control of procurement by State Trading Enterprise

(agricultural and fertilizers)

The role of State Trading Enterprise is confined to only

essential food items which have sensitivities for

production and distribution.

TRQ to protect its producers (powdered milk, maize,

crude sunflower, sunflower seeds, colza and mustered oil)

India has TRQ for only 4 items,; milk, corn, sunflower and

mustard oil.

Countervailing duty (CVD) of 4% (all products) CVD is charged on imports of like goods if manufactured

in India, so as to accord National Treatment to imported

goods as per Article III of GATT.

National Calamity Duty (tobacco products, motor sprits,

polyester, motor vehicles)

The duty is also charged on domestically produced

products.

Additional duty of excise and specific duty per meter or

kg (textile products)

All textile and textile products are exempted from levy of

additional excise duty.

Education cess @ 2% of the aggregate duty (all products) Education cess on imported goods is in the nature of tariff.

The sum total of education cess and basic customs duty is

within the WTO bound rate.



Exporting Country: Bangladesh


License from Bureau of Indian Standards cement, gelatin,

condensed milk, electrical appliances, mineral water, steel

products, leather products, x-ray equipments, dry cell

battery, thermometers,, helmets and gas cylinders)

The following steps have been taken: 1) number of items

for which certification is needed has been reduced from

109 to 68, 2) marking fees for BIS license has been

reduced for SAARC countries, and 3) processing charge

for SAARC countries has been abolished.

Requirement of laboratory testing (all products) 100% checks are done on only 14 high risk food items.

Requirement of chemical testing (leather and melamine) The following steps have been taken; 1) mandatory license

is required only for safety boots and shoes for minors, 2)

license for safety boots and shoes for minors can be

obtained from BIS, and 3) every consignment is not

required to be checked by BIS.

Detailed product information (all prepackaged goods) These are statutory requirement under the Consumer

Protection Act.

Bio-security and sanitary permit (Primary agricultural

products)

Requirement has been set as per Articles 2 of the

Agreement on Sanitary and Phyto Sanitary Measures (SPS)

under WTO.

Compliance of Food Adulteration Act regarding shelf life

of goods (processed food products)

Compliance of shelf life is mandatory for all processed

food item but determination is not arbitrary. It is based on

PFA Rules 1955.

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Exporting Country: Bangladesh (Contd.)


Special labeling of country of origin (jute bags/sacks) The rationale is that the country of origin on product is

to be mentioned because if there is any irregularity in the

quality of the imported item, the source could be tracked.

Certificate of non-halogenated hydrocarbon (jute

products)

Domestic producers face the same stipulation.

Pre-shipment certificate about presence of no hazardous

dyes ( textile and textile products)

The provisions are also in effect for domestic industries.

Registration of the drug with the Central Drug Standard

Control Organization (pharmaceutical products)

No import license is required for import of

pharmaceuticals. All import of bulk drugs are set as per

the EXIM policy 2004-2009.

Requirement of import license (mostly consumer goods) Requirement of import licenses are under exception

clauses of Article XX and Article XXI of GATT.




Registration of drugs with the Central

Drug Standard Control Organization

(pharmaceutical products)

Pakistan is also facing similar problems in Bangladesh. Both

countries are looking at the issue bilaterally.

Exporting Country: Bangladesh

Recent Developments Concerning Bangladesh Export• Export of soap to W. Bengal from Bangladesh discontinued as of May 2010: NOC

required from Kolkata Drug Administration office (dual authority!)

• For food items:At least 60% remaining life required from the date of manufacturing

• Shillong Customs: Items to be kept at customs bonded warehouse and clearance by

post (previously importers‟ warehouse; clearance by hand) delays cost

escalation

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Notification and Responses of Non-Tariff and Para-Tariff Measures

• Sri Lank did not provide any notification or replies during the fourth Sub-Group Meeting.

However, according to a study conducted by RIS, following NTBs were identified in bilateral

trade between Sri Lanka and India:

Delay in customs clearance.

Port restrictions for some products.

Referring the country of origin to check the fulfillment of rules of origin.

Carrying out various tests despite goods possessing authorized certificates.

Food control systems in operations.

• ILBFTA Agreement stipulates that any dispute that may arise between commercial

entities of the Contracting Parties shall be referred for amicable settlement to the nodal

apex chambers. Such references shall, as far as possible, be settled through mutual

consultations by the Chambers. In the event of an amicable solution not being found, the

matter shall be referred to an Arbitral Tribunal for a binding decision.The Tribunal shall be

constituted by the Joint Committee in consultation with the relevant Arbitration Bodies

in the two countries.


NTBs in ASEAN

26

Non-tariff Barrier Number of Tariff Line Affected Percentage

Customs surcharges 2,683 69.42

Additional Charges 126 3.26

Single Channel for Imports 65 1.68

State-trading Administration 10 0.26

Technical Measures 568 14.70

Product Characteristic Requirement 407 10.53

Marketing Requirements 3 0.08

Technical Regulations 3 0.08

Total 3865 100.00

Source: ASEAN Secretariat

Most Prevalent NTBs in ASEAN

It is of interest to note that NTBs continue to remain a major issue of concern for the

ASEAN member countries inspite of the long history of trade cooperation and

integration

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NTBs in ASEAN

27

Country Number of Reported NTBs Typology of NTBs

Cambodia99 Import licensing, Permits, Technical Measures (SPS), Non-Automatic

licensing, Prohibitions

Thailand134 Technical measures (SPS), Tariff-rate quotas (TRQ), Non-Automatic

licensing TRQ, Import licensing, Prohibitions

Vietnam464 Prohibitions, Import licensing, Internal taxes and charges, Labelling

requirement, Technical regulations

Malaysia1017 Import licensing, Approved permit, registration certificates,

Certificate of approval, Technical measures (SPS)

Source: ASEAN Non-Tariff Database

ASEAN’s NTBs REPORTED (as of 2007)


Possible Non-Tariff Barriers in Trade in Services

• Thresholds on the total value of service transactions

• Restrictions on the number of service operations

• Limits on the number of natural persons to be employed in case of supply

for a particular service

• Measures which force a service supplier to supply a service through a

particular set of legal means

• Limits on the percentage share of foreign investment, which may be

accounted for by foreign shareholders

28

In view of the SAFAS, there is a possibility that NTBs will also emerge with

regard to services trade in future

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Section IV: Dispute Settlement Mechanism to Deal with NTBs in Various RTAs

29

ASEAN EU NAFTA

Any differences, as far as possible, should be settled

amicably through Consultation between the Member

States

If the consultations fail to settle the dispute within 60

days, the matter can be raised at the Senior Economic

Officials Meeting (SEOM), which may establish a panel

The panel should be established no later than 30 days

after the date on which the receipt of the dispute

The panel must submit findings to the SEOM within

60 days of its formation

The SEOM should consider the report and make a

ruling on the dispute within 30 days

An appeal on the ruling by the SEOM may be

submitted to the ASEAN Economic Ministers (AEM)

within 30 days of the SEOM‟s ruling

Member States who are parties to a dispute are

expected to comply with the ruling or decision

within a reasonable period of time

Request for

consultations; 10 – 30

days

Consultations; 60 days

Appointment of panel;

45 days

Panel deliberations and

ruling; 6 months

If there are no appeals,

ruling must be adopted

within 60 days

An appeal to the

appellate body can be

made within 60 days of

the ruling

Appellate Body ruling

must be adopted

Request for Panel Review filed

Complaints to be filed within 30 days of

Panel Review request

Panel Selection to be completed by the

Parties by Day 55

Final Determination, Reasons, Index and

Administrative Record to be filed within 15

days after filing of Notice of Appearance

Briefs by Complainants to be filed within

60 days after filing of Administrative Record

Briefs by Investigating Authority or

Participants in support to be filed within 60

days after receipt of Authority's Briefs

Reply Briefs to be filed within 15 days

Oral Argument to begin within 30 days

after Reply Briefs

Panel Decision Due 315 days after request

for Panel Review

Dispute Settlement Mechanisms in various RTAs

Whilst the SAFTA stipulates that CoE would act as the DSB for the purpose of settling NTB related disputes,

other RTAs have their own modalities to address the attendant issues. In majority of the cases RTAs such as EU

and NAFTA tend to follow the WTO DSM mechanism whilst ASEAN's DSM is somewhat different.


Section V: Policy Recommendations to Deal with NTBs in SAARC

Standards and Certification

A majority of NTBs and perceived NTBs relate to SPS-TBT, and health-hygiene related

standards. Many of these concern national standards. The best way to go forward would

be to : (a) ensure that these are not country-specific but of general/common nature; (b)

ascertain that whether the requirements are beyond internationally recognised standards

e.g. Codex plus; (c) strengthen national standard setting institutions to meet compliance

requirement; (d) strengthening of technical laboratories, standardisation, testing, quality

management, certification authorities and inspection bodies, which ought to be perceived

as an investment priority by the SAARC members; (e) signing of mutual recognition

framework agreements; (f) strengthening of regional institutions such as SARSO; (g) raising

the technical capacity and strengthening the ability of CoE in SAARC to deal with NTBs;

and, (h) designing a programme of technical support in order to strengthen capacity of low

income SAARC members, with support from both SAARC developing members and

multilateral institutions.

30

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Dealing with NTBs: Mutual Recognition Agreements

One way of dealing with NTBs, many of which originate from SPS-TBT measures,

certification and laboratory testing, health-hygiene requirements, is to set up a mutual

recognition framework

31

• Indeed, India has already submitted such a bilateral framework agreement to

Bangladesh for the latter‟s consideration

• There has been an agreement that developing SAARC members will provide

support in the form of technical assistance and capacity-building to other members

of SAARC

• The SAARC members have decided to set up a SAARC Standardisation

Organisation (SARSO) in Bangladesh, which is an important step in this direction


Mutual Recognition Agreements (MRAs)

• Developing MRAs is also critically important for delivery of services particularly

through Mode 4 (Movement of Natural Persons)

• Lack of recognition of qualifications, skills, or experience is one of the most

common barriers affecting Mode 4 (Chanda 2005)

• The mechanisms for assessment of equivalence of qualification, licensing, and

other requirement related regulations with a view to improving market access

have been developed under a number of regional arrangements – the most

prominent examples being the European Union, NAFTA etc.

• Zarrilli (2005) suggests that two basic approaches have been singled out as the

basis for mutual recognition

vertical approach: recognition is provided on a profession-by-profession

basis

horizontal approach: mutual recognition is provided without prior

harmonization of curricula and training requirements, on the basis of a

broad equivalence of qualifications

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Border Measures:

(a) A targeted programme needs to be designed to facilitate cross-border trade

through development of border infrastructure, and if required, coordination of

infrastructure development at border points; (b) harmonisation of customs rules and

regulations, valuations and customs procedures; (c) building of capacities to deal with

the most prevalent SPS-TBT related NTBs at particular border points

Strengthening the Financing of Intra-SAARC Trade

To facilitate trade among SAARC countries, financial intermediation is also emerging as

an important constraint. These relate to presence of adequate banking facilities,

honouring of L/Cs, L/C margins, time required for verification of bank documents etc.

The central banks of the SAARC countries will need to coordinate the respective

regulations, particularly with respect to trade with N.E. States by facilitating setting up

of banking facilities in those areas.

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Dealing with Para-tariffs and Surcharges

Many of the perceived NTBs relate to state taxes, surcharges, cess, VAT etc.

These are, as a rule, general in nature and not country-specific. Since zero-

tariff preferential access provided under SAFTA relates to only customs duties

at border points, these continue to remain in case of products that enter

under SAFTA Duty Free facilities. However, SAARC member countries may

think about providing preferential treatment that covers such non-border

barriers, on a mutual basis, to address at least some of these concerns.

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Making the CoE More Effective

The CoE is the main focal point for arbitration with regard to discussions and disputes in the

context of NTBs in SAARC. Steps should be taken to strengthen the capacity of CoE in terms

of data generation on NTBs and settlement of disputes. Whilst periodic meetings are the

institutional modalities of work of CoE at present, more needs to be done to invest the CoE

with appropriate capacities to deal with NTBs on a continuing and permanent basis.

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Using WTO DSB Mechanism

Although the SAARC countries, as a rule, should try to deal with NTB related disputes in the

CoE, as members of the WTO they can also resort to WTO-DSM to settle issues which can not

be appropriately addressed in the CoE. This route should not be seen as something which

undermines SAARC solidarity. It may well be a better strategy, in specific cases, to come to a

resolution through the WTO-DSM than to keep alive a conflict in the CoE for a protracted

period.

• More meaningful participation in global standard setting bodies

• Leverage AfT to address NTBs in South Asia

•The EIF-DTIS being carried out at present in SA-LDCs ought to give due prominence to

identifying measures to address NTBs so that these then can be recommended for support

under the AfT

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Thank You

for

Your Attention