NTM, TBT and SPS “Foe” or “Friend” in International Trade.

In international trade, terms like NTM (Non-Tariff Measures), TBT (Technical Barriers to Trade), and SPS (Sanitary and Phytosanitary measures) are often discussed, as they have significant implications for the flow of goods and services across borders. Whether these measures act as a 'foe' or 'friend' in international trade largely depends on how they are applied, their objectives, and the context in which they are used. Below, we'll break down each of these concepts and examine how they can serve as either obstacles or facilitators to international trade.

1. Non-Tariff Measures (NTM)

NTMs refer to all regulatory measures other than tariffs that affect international trade. These measures include quotas, import licensing, anti-dumping laws, subsidies, and other types of government interventions that regulate or restrict trade.

NTMs as Friends:

• Promote Safety and Quality Standards: NTMs are often introduced to ensure that products meet the necessary standards for health, safety, and environmental protection. For example, measures to prevent the spread of diseases or protect the environment can build consumer trust and market acceptance for imported goods.
• Support Domestic Industries: In certain cases, NTMs may serve as protection for infant industries in developing countries, giving them time to grow and compete in the international market.
• Compliance with International Norms: NTMs can help countries align with international standards, ensuring that the trade flows smoothly and is mutually beneficial.

NTMs as Foes:

• Barriers to Trade: Some NTMs can act as hidden barriers to trade, making it more difficult for foreign products to enter a market. This can be particularly challenging for developing countries that may face complex regulatory requirements or expensive compliance procedures.
• Unnecessary Complexity: NTMs often add bureaucratic hurdles and increase the cost of doing business. For instance, complex import procedures, technical regulations, and product certifications can delay shipments and increase operational costs.
• Discriminatory Practices: NTMs may be used unfairly to protect domestic markets by making it harder for foreign competitors to enter, which can lead to trade disputes or be seen as a form of protectionism.

2. Technical Barriers to Trade (TBT)

TBTs are regulations, standards, testing, certification, and inspection requirements imposed on imported goods. These measures are generally designed to ensure that products meet certain technical standards or specifications for safety, health, environmental protection, or other reasons.

TBTs as Friends:

• Consumer Protection: TBTs ensure that products sold in a market are safe and meet quality standards, which can enhance consumer confidence and product acceptance.
• Standardization: TBTs help in harmonizing technical regulations across different markets. For example, the adoption of ISO standards or WTO’s TBT Agreement can make it easier for exporters to enter multiple markets that recognize the same standards.
• Facilitating Technological Innovation: By setting standards, TBTs can encourage innovation in technology, manufacturing processes, and product quality, which benefits both consumers and producers in the long term.

TBTs as Foes:

• Unnecessary Restrictions: Sometimes, TBTs can be overly restrictive or overly complicated, making it difficult for businesses, especially small or new exporters, to comply with different regulations in each country.
• Disguised Protectionism: TBTs can be used as disguised protectionist measures to prevent foreign goods from entering the market. For example, requiring excessive or difficult-to-meet technical standards can limit trade opportunities for foreign producers.
• Increased Costs and Delays: Meeting the requirements for certifications, testing, and product modifications to comply with TBT regulations can result in higher costs and longer timeframes for product development, especially for smaller businesses or less-developed economies.

3. Sanitary and Phytosanitary Measures (SPS)

SPS measures are standards and regulations aimed at protecting human, animal, or plant life from risks arising from the spread of diseases, pests, or contaminants. These measures include regulations related to food safety, animal and plant health, and quarantine.

SPS as Friends:

• Health and Safety: SPS measures are critical for protecting public health by ensuring that food and agricultural products are safe to consume and free from harmful contaminants or pests. For example, food safety standards ensure that imported food products meet health guidelines and are safe for consumers.
• Environmental Protection: SPS measures also protect the environment by preventing the spread of invasive species or pests that could damage local ecosystems, agriculture, and biodiversity.
• Trust in Trade: When SPS measures are transparent, scientifically-based, and internationally recognized, they can enhance trust in the quality of traded products, promoting trade and investment.

SPS as Foes:

• Trade Barriers: Strict SPS measures can sometimes be used to create barriers to trade, particularly when they are seen as unnecessary, overly complex, or discriminatory. For instance, if one country imposes overly stringent food safety regulations that other countries find difficult or costly to meet, it can limit market access for certain goods.
• Protectionism: SPS measures can be exploited as a form of protectionism, especially when they are not aligned with international norms or are applied in a way that disproportionately affects exporters from developing countries.
• High Compliance Costs: The need to meet SPS requirements often results in additional costs for exporters, such as testing, certification, and compliance verification, which can be particularly burdensome for smaller producers or exporters from low-income countries.

Balancing the Foe and Friend Narrative:

In conclusion, NTMs, TBTs, and SPS measures can act both as friends and foes depending on how they are designed, implemented, and enforced:

• Friends: They ensure the quality, safety, and security of traded goods, protect public health, and align international trade with sustainable development goals. Well-crafted regulations help create trust and fair trade practices, benefiting both producers and consumers.
• Foes: When these measures are misused, overly restrictive, discriminatory, or inconsistent with international standards, they can impede market access, create trade barriers, and result in protectionist behaviour that harm global trade.

Ultimately, the balance between these measures and their application is key to determining their role in the International Trade Ecosystem. Countries and trading blocs need to ensure that these measures are transparent, scientifically justified, non-discriminatory, and proportionate to the risks they seek to address, thereby facilitating trade rather than restricting it.