Non-Tariff Measures

Non-Tariff Measures (NTMs) are government regulations that affect trade but do not involve tariffs. These can include standards, certifications, and technical regulations, among others.

The term “non-tariff measures” (NTMs) covers a diverse set of measures in terms of purpose, legal form and economic effect. NTMs include all regulatory measures other than tariffs and tariff-rate quotas that have direct impact on global trade. 

These measures can be broadly divided into 3 groups. 

1. Technical Measures: this includes regulations, standards, testing and certification, primarily Sanitary and Phytosanitary (SPS), Technical Barriers to Trade (TBT) measures and Pre-Shipment Inspection and Other Formalities.

   
   

2. Non-Technical Measures: this includes quantitative restrictions price measures, forced logistics or distribution channels, etc. A list of these measures is mentioned below:

• Contingent Trade-Protective Measures

• Non-Automatic Licensing, Quotas, Prohibitions And Quantity-Control Measures Other Than For SPS Or TBT

• Price-Control Measures, Including Additional Taxes And Charges

• Finance Measures

• Measures Affecting Competition

• Trade-Related Investment Measures

• Distribution Restrictions

• Restrictions On Post-Sales Services

• Subsidies (Excluding Export Subsidies Under P7)

• Government Procurement Restrictions

• Intellectual Property

• Rules Of Origin

3. Exports: this includes Export-Related Measures.

NTMs impact especially exporters and importers in developing and least developed countries (LDCs) who struggle with complex requirements. Businesses in these countries often have inadequate domestic trade-related infrastructure and encounter administrative obstacles. 

NTMs that are not typically considered to be very limiting can pose significant burdens in LDCs. In addition, the dearth of export support services and insufficient access to information on NTMs impede the international competitiveness of firms. 

As a consequence, both NTMs applied by partner countries as well as domestic burdens have an effect on market access and prevent firms from seizing the opportunities created by globalization.

For MSMEs and exporters, complying with NTMs can be a major challenge, but it is also crucial for maintaining market access and competitiveness.  Complying with NTMs can be particularly difficult for MSMEs and exporters, who may lack the resources to navigate complex regulations and requirements. However, failing to comply with NTMs can result in penalties, loss of market access, and damage to a company's reputation. 

Therefore, it is important for businesses to develop strategies for managing compliance with NTMs.  One way to manage compliance with NTMs is to invest in quality management systems (QMS) and certifications such as ISO 9001 or ISO 14001. These can help to ensure that products meet the relevant standards and regulations, and can also enhance a company's reputation for quality and sustainability.  

Another strategy for managing compliance with NTMs is to work with industry associations and other stakeholders to stay informed about changes in regulations and requirements. By staying up-to-date on the latest developments, businesses can anticipate and prepare for changes, minimizing the risk of non-compliance. 

Finally, MSMEs and exporters can also leverage technology and data to streamline compliance with NTMs. By automating compliance processes and using data analytics to track regulatory changes, businesses can reduce the time and resources required to comply with NTMs, while also improving accuracy and reducing the risk of errors.  Overall, managing compliance with NTMs is a key challenge for MSMEs and exporters, but it is also essential for maintaining market access and competitiveness. 

By investing in QMS, staying informed about regulatory changes, and leveraging technology and data, businesses can successfully navigate the complex world of NTMs and emerge as leaders in their industries.

Helping MSMEs navigate and comply with Non-Tariff Measures using technology is one of our key product goals. We believe technology can bring transparency in global supply chain and can help in creating cross-border trust amongst local and global players. If you are an existing or potential Indian Exporter looking to build trust in foreign markets, then please download and check out our app.