Documente Academic
Documente Profesional
Documente Cultură
Cleins C. Coughlin
and Geoffrey E. Wood
Cletus C. Coughlin is a senior economist at the Federal Reserve
Bank of St. Louis and Geoffrey E. Wood is a professor of
economics at City UniVersity, London. Thomas A. Pollmann provided research assistance.
An Introduction to Non-Tariff
Barriers to Trade
measured. For example, the effects of a government procurement process that is biased toward
domestic producers are difficult to quantify. In
addition, many non-tariff barriers discriminate
among a countrys trading partners.
This discrimination violates the most-favored-
33
This paper provides an introduction to nontariff barriers. We begin by identifying numerous non-tariff barriers and document their proliferation. We then use supply and demand
NON-TARIFF BARRIERS:
TYPES AND USE
A tariff is a tax imposed on foreign goods as
they enter a country; non-tariff barriers, on the
other hand, are non-tax measures imposed by
governments to favor domestic over foreign
suppliers. Non-tariff barriers encompass a wide
range of measures. Some have relatively unimportant trade effects. For example, packaging
and labeling requirements can impede trade,
but usually only marginally. Other non-tariff
measures such as quotas, voluntary export
restraints, trade restraints under the Multifiber
Arrangement, non-automatic import authorizations and variable import levies have much
more significant effects.~These hard-core nontariff measures are designed to reduce imports
and, thereby, benefit domestic producers. The
discussion below focuses on these hard-core
barriers.
Quotas
Non-Automatic Import
Authorizations
~This
subset of non-tariff barriers is taken from Laird and
Yeats (forthcoming). This subset excludes a number of
non-tariff barriers that can also have sizeable effects.
Among these are government procurement policies, delays
at customs, health and sanitary regulations, technical standards, minimum import price regulations, tariff quotas and
monitoring measures. See appendix 4 in Laud and Yeats
for a glossary of terms associated with non-tariff barriers.
Non-automatic import authorizations are nontariff barriers in which the approval to import
is not granted freely or automatically. There
,A.wAnv,tcon,
~aa,,
34
i\T
00
In a current study, Laird and Yeats (forthcoming) measure the share of a countrys imports
subject to hard-core non-tariff barriers. Because
countries frequently impose non-tariff barriers
on the imports of a specific good from a
specific country, but not on imports of the
same good from another country, they disaggregated each countrys imports by both product and country of origin to permit calculation
of the total value of a countrys imports subject
to non-tariff barriers. Each countrys coverage
ratio is simply the value of imports subject to
non-tariff barriers divided by the total value of
imports.
Table 1
European
countries
ratio, the
35
Non
198<
eta
I.
6%
87
1
4,3
9
14
88
201
112<
6
18
199
18
37
1
4
19
6
69
0
Cl
43
12
04
Dante
Gefearty edflep
tie
aS
eet~ n
P$ftaclantfs
dze4apd
at
Japan
4
1
46
P4ezeafetid
as
ted
Dtfference
190%
1 7%
12
8
29
~
10<
1
abt arport
mast andiag
empp artsmngvatwemea tta
eat mt mid
estra
i*det
Mtber Art game
to
m
~pti tatof 0
COOpstatfon
cc a me
Auetr~a
eat
stat.
Swede
b
tar Ins mjres
trmCIU4
mat tmfl$tt<
hare efi
ports (b~ us subject o hard
agre
taptI sneasurea< comput tig lbs mnde *
and t$e
measm, are p
& a cons
961 jradt base P~tSum prodttc
v beep a chat
sd
beta latlori
try trade.b0
Table 2 contains coverage ratio data on a product basis. As a result of the Multifiber Arrangement, trade in textiles and clothing is subject to non-tariff barriers. For example, slightly
more than one-third of European Community
and U.S. imports of textiles are affected, while
approximately two-thirds of European Community and three-quarters of U.S. imports of
clothing are affected. Since these goods are
among the most impottant manufactured exports from developing countries, coverage ratios
for imports from developing countries relative
to industrial countries tend to be higher.
Table 2 also identifies some other manufactured goods affected substantially by non-tariff
harriers, especially iron and steel and transport
equipment. More than three-quarters of U.S. im-
ports of iron arid steel and more than 40 percent of transport equipment are affected. The
corresponding figures for the European Community are 46.2 percent and 23.6 percent.
aries
cent in Denmark t 46.4 percent in et~ Zealand and, in 1986, from 7.9 percent in Denm~ k
0 32.4 pe cent in New Zealand. Second, for
most countri s, the coy age ra io ha in rease his caus d the coverage t atio u ing the world
tr de igures of all is ount ies to increase
from
.1 percent in 1981 to 17.7 per ent n
JANIIARVIFFRR1IARV
14P,ci
Table 2
Coverage Ratios of Selected Non-tariff Measures on Selected Manufactured
Goods: 1986
SITC
Description
61
62
63
64
65
66
67
68
69
71
72
73
81
82
83
84
85
86
69 ~10~
Switzerland
7 7%
9.1
I 0
59
347
2.9
462
0.8
21
3.1
il_I
236
00
0.3
0.9
65.7
11.3
3.8
30 8
0.0
19
00
00
0.0
10
1.9
5.6
4.7
0.0
847
0.0
0.0
530
18.6
74.6
00
Leather products
Rubbor products
Wood and cork
Faperandart~Ies
Textiles
Cement. clay and glass
Iron and steel
Non-ferrous metals
Metal manufactures. n e 5.
Non-electric machinery
Electric machinery
Transport equipment
Plumbing & lighting f:xtures
Furniture
Travel goods
Clothing
Footwear
Instruments
S/r,
Finland
0 0%
00
00
00
1 6
0.0
00
35
00
0.0
00
00
00
00
0.0
12.1
00
0.0
Japan
--
47 0 %
13.6
00
00
Norway
0.0%
0.7
00
00
6.1
0.0
00
0.0
0.0
0.0
00
0.0
0.0
0.1
0.0
865
0.3
0.0
555
24.1
0.0
0 4
1.0
4.4
03
173
00
00
0.0
Il 3
6.9
14.1
New Zealand
59 9%
- -
United
States
0.0%
539
53.0
486
27.4
54.5
64.1
8.7
35.3
00
0.0
00
345
0 1
763
0.0
11.0
359
0.0
64.0
22.1
682
0.0
100.0
52.2
82.9
53
1.4
41.1
0.0
1.1
18.9
764
0.1
0.0
NOTE See table 1 for the list of hard-core non-lariff measures The coverage ratio is. for each given product and country,
the imports subject to a hard-core non-tariff measure divided by total imports
Table 3
Coverage Ratios of Non4ariff Measures on Selected Agricultural Goods: 1986
United
SITC
00
01
02
03
04
05
06
07
08
09
11
12
21
22
23
24
25
26
29
--
Description
-.
Lmve animals
Meat
Dairy products
Fish and seafood
Cereals and preparations
Fruits and vegetables
Sugar and honey
Colfee and cocoa
Animal feeds
Food preparatons
Beverages
Inbacco
Hdes and skins
Oil seeds and nuts
Rubber
Wood and cork
Pulp and paper
Silk, wool, cotton. inc
~~ude animal & vegetable matter
EC ~1O~ Switzerland
602%
77 8
99.7
46
969
36.0
85.8
175
ii g
10.2
249
0.0
0.0
24.8
00
06
00
go
19 0
100.0%
97.8
45.5
583
87.8
44.8
0.0
0.0
309
13.4
764
0.0
991
560
0.0
396
0.0
248
78 0
Finland
95.3%
89.3
1000
97
834
51.6
89 1
00
53
0.0
88.0
0.0
00
1000
00
0.0
00
00
5.3
Japan
1.2%
65.7
732
100.0
32.5
18.3
84.6
00
13.7
173
70.7
843
181
43
0.0
0.0
0.0
1 2
51.8
Norway
98.0%
99 7
82 1
80.4
100.0
1000
1000
100.0
92.7
1000
100.0
00
00
1000
00
00
00
4.6
69 1
New Zealand
00%
14.4
12.7
36
5 1
392
0.9
0.9
16.9
737
5.6
5.1
0.0
00
00
24
00
164
11 2
States
0.00/0
00
87.8
0.0
0.0
0.9
91.9
2.3
0.3
04
00
00
32
74.0
0.0
00
00
2.1
11.0
NOTE See table 1 br the t:si of hard-core ncr-la-itt measures. The coverage rato is. for each given product and country the imports sub~ecito a hard-core non tariff measure divided by tnmat imports
Euiopear community nt,a-tiade s excluoeo
SOURCE Laird and Yeats tfodhcoming~
37
Table 4
The Use of Selected Non-tariff Measures
Change in the Share of Imports
Facing NTMs, 1981~862
QUOT
03%
03
05
58
82
22
0.1
7.5
04
26
VER
MFA
NAIA
VIL
QUOT
VER
MFA
0.0%
01
06
0.0
00
0.0
0.0
-0.1
02
-02
NAIA
00%
0.0
00
0.0
00
0.0
0.0
0.0
0.0
0.0
VIL
5.1%
2.6
3.0
12
&8
2.0
4.6
0.8
2.0
23
1 2%
23
4.9
18
12
29
1.3
18
30
30
5.7%
1.1
3.0
7.1
3.9
5.1
2.2
70
14.0
5.6
5.2%
1.4
20
2.2
38
4.4
22
66
63
3.7
11%
01
0.4
16
0.4
0.9
0.1
0.6
2.5
0.5
22%
12
20
1.8
4.4
2.3
1.5
1.2
36
2.1
0.0%
00
00
0.0
00
0.0
0.0
0.0
0.0
0.0
25
09
142
52
253
05
0.0
0.0
0.0
0.0
ao
69
0.4
02
0.0
0.0
0.0
32
28
6.7
7.7
2.2
256
ao
05
18
1.8
0.0
00
0.0
00
00
01
-05
16
15
00
0.0
0.0
00
00
44
0.0
0.1
0.0
0.0
0.0
00
00
0.0
0.0
1.1
8.8
0.0
0.0
0.0
0.0
0.0
0.0
1.4
4.0
3.1
2.3
42
2.0
07
22
0.1
01
0.4
Petroleum prooucts have been excluded trom the calculations The abbrevialions for the non-tariff measures are as follows:
QUOTquotas, VER voluntary export restraints; MEArestrictions under the Multifiber Arrangement: NAIA-non-automatic
import authorizations; and VIL-variable import levies.
2
The change is tne 1986 share less the 1981 share.
3
European Community intra-trade is excluded.
SOURCE: Laird and Yeats (forthcoming)
emerge. In 1981, non-automatic import authorizations and quotas affected the largest share of
imports when all 16 countries are considered;
by 1986, this was no longer the case. Voluntary
export restraints, whose use in the United
States, Greece, the Netherlands and Great Britain rose substantially, affected the largest share
of imports (5.3 percent) by 1986. Meanwhile,
the share of imports affected by quotas rose
from 4 percent in 1981 to 4.7 percent by 1986.
countries indicate that voluntary export restraints were used more extensively by the
United States than by other countries. By 1986,
JANUARY/FEBRUARY 1989
38
Figure 1
The Price and Quantity Effects of a Quota
and a Voluntary Export Restraint
Price
PQ
PB
OF
Quantity of
Imports
39
The Im~
A v~iIjntai~jEtpon
Kes~edin Pratt
J%ipane Autonuibile
4
ittt
//
a
n
1
aI$1
to
4/
\\N
(17
Of~.
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444444
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444
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adthtio
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qr pri
urn repras frt
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tSu~~so bNb
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that
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ntNaN~
4oQDOto7 000job
m~
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~pa ~t.
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kt
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44
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IN
ixnvlrrn*t
ian,
baa
40
tlu
.tstLlIlipIi)It
pflHhticII~ gained
41
ic,ao
pioditt-tr~
,
tilt-,
c\pertehlc-iytg
rapid
grou UI - n sugar tx..
ii till,
lr-ath I lc,~ts i-t-s nnidetl Lu [lit-se ~
1
rh~lilgtS fl a ntpiti e.\pansiwl ill unpork at
sllgiti t ontaining gimcIs t;istiecl. In l,tu,t tic
tIilltt-ential hrtn-oin .S and u orlti sttgai
pt-it-us hr-i-ann- so ar-ge at out time that
sugait-otiuonmg gootis it Ott imported sc.tltlv
liii their 5ti~itI content. lot trt:tntplt-, tlutuig
1983, uor]cj sttnar ~
detlincd so shai pft
that in June I 185. till L .~. sugar iii itt \VC1
77(i fit-rI-c ill oF the u odd pine. 1 his tiil
tere.iicn triulUlced sor~etic-ins n the I ntled
Stiiit to mpoi-t (.an~icIiaiiputt-aLt ink
whit ii ii as nut sUIl)mr-t to liii qtiotir, ~
iC55 it ti OntiLict the sugar.
-l lit iittluced chanws in pi~tittcltoti and
I fl.tth hit i IoicttI ~t illIJhttIt!d of acithtic~nal
I .5. tifluits to niautttin titt sugar prices. t Or
risc-al ti-al I 9-MS tltt I ~ sugar import (iota
u as t-ctiitc-tti 17 pii-t tnt ibis Vt as toiluti Ott
r edtuu-uions ol 21fl liii -utit iii t )SU anti
-15 T pout-out itt 987 I tacit- rectrirtiori, nit
5Lt~iut stiIisliILIi(s also hit r resUlltd. In a nI
rltt-st ate II nih (11101 Urrlrt bait au itiilit)iIs ot
curia it svitJps atici hbeti~~tti
tugtts ill hulk in
_Iuttt- 1983; and 2l ttnittu-goruc-t quotas ciii a
hroatl lange ol ingat rnntaiuing articles ri
both bulls and retail Ioims in _lanimau,t 1983
I lie otlett cit Ibis cut was tiiitigattd sortieu hat in 19.53 ~t hen tlit I nitt-cl Stales flailsI erred 2 jicc t!iit at \ic-atatzttas titiota to
Haritiurasanac butt that sinittltittteriu~lt
prirtislied he Sandinista t-.czinie and eu arch-il
a !ltighhlfl-irhg s[att- thotight to hi in ciangt-t
ti-nm tht- Nit-~tiaau;~nuppoi-tetiitnii~Ilioii.
this action , olattd UVI I ittlOs and gent
i ated nun-h criticism of the nitcti Stales.
Such a qttrtta c~ ctim inl-rcai-, tilt- likohhood
that I ade potict i., used its ihiJtlet-Otlothiir
ieasotin
hit lesson, Ii out [he L S. sugar ptogt lilt
art straiglitlot u ar-cl. I it-st stgnttti~ititt-tisI.,
li,i~t heti iiiiiosttl on ( -.5 tonstmit-rs Sc
ronti. tltt resulting (listt;itioths iii ti,utioiiiit itt
tt:n!ltts bitt- h,trnird I .5. pi od ut-trs tlerx-tt
(Wilt on sugar I hut!, ccortoiliic rtspoitses to
the legislation thu e tot eah-d a ntuniher of
loopholes llitt hat i tiutc!ssitrtcd atIchtitinal
i t~[rictiun-, anti tltstumt:ons so that I.2i. SlJt4itI
otiurt-r-s could continue Itt here-lit. I otui Lb
_~ ;tttutnpts It) insure
tan ntss liat-t rilclssi
tateil -uhstaotial rtsoitrrc~ ho ,trtrtWl pro
duction anti tt-ack hehnit 101
naIl., - tIn- ito
giant has been tisiti
Its pcihilic-ctI purpost! to
I ru at d anti punish foreign I tiUlmiti it_s.
43
44
8
For a brief history of multilateral trade negotiations, as well
as details on the current negotiations, see The GATT
Negotiations and U.S. Trade Policy, a 1987 study by the
Congressional Budget Office For additional details on the
current multilateral negotiations, see Aniaria (1986) and
the 1987 report by the United States International Trade
Commission, Operation of fhe Trade Agreements Program.
19
The sixth round, known as the Kennedy Round, marked
the first time for a GATT agreement on non-tariff barriers.
Agreements were reached on an anti-dumping code and
the elimination the U.S. system of American Selling
ccfln~al
cc
5I&KO( fl~rcy
fltII~
awarding bids.
The code on technical standards attempts to
ensure that technical regulations and product
standards such as labeling, safety, pollution and
quality requirements do not create unnecessary
obstacles to trade. the code does not specify
standards; however, it establishes rules for setting standards and resolving disputes.
The code on import licensing procedures,
similar to the code on technical standards, is
not spelled out in detail. Generally speaking,
governments stated their commitment to simplify the procedures that importers must follow
to obtain licenses. Reducing delays in licensing
and paperwork are two areas of special
interest.
The code on customs valuation established a
uniform system of rules to determine the customs value for imported goods. This code uses
transaction prices to determine value and is
designed to preclude the use of arbitrary values
that increase the protective effect of a tariff
rate.
Finally, the anti-dumping code prescribes rules
for anti-dumping investigations, the imposition
of anti-dumping duties and settling disputes.
The standards for determining injury are clarified. This code obligates developed countries to
treat developing countries preferentially.
45
CONCLUSION
Non-tariff barriers have effects similar to
those of tariffs: they increase domestic prices
and impede trade to protect selected producers
at the expense of domestic consumers. As
shown in the case studies of sugar and automobiles, they also have other effects, generally
adverse.
Despite the adverse national consequences,
the use of non-tariff barriers has increased
sharply in recent years. The chances for a reversal of this trend appear to be small. The
variety of non-tariff measures, the difficulties of
identifying and measuring their effects and the
benefits received by specific groups combine to
make a significant reduction of non-tariff barriers in the ongoing Uruguay Round negotiations unlikely.
The original mission of GAn, which has been
largely achieved, was to reduce tariffs. The
question, however, of why policymakers have
preferred to use non-tariff barriers rather than
tariffs in recent years remains. The more certain protective effects of non-tariff bat-riers is
one plausible explanation. A second explanation,
which focuses on the distribution of the benefits, is that the benefits of non-tariff barriers
can be captured by foreign producers and
domestic politicians. Such an allocation of benefits increases the probability that the political
process generates larger amounts of non-tariff
barriers relative to tariffs. A final explanation is
that their adverse effects are generally less obvious to consumers than the effects of tariffs.
REFERENCES
Anjaria, S.J. A New Round of Global Trade Negotiations,
Finance and Development (June 1986), pp. 2-6.
Bhagwati, Jagdish N. On the Equivalence of Tariffs and
Quotas, in RE. Caves et al., eds. Trade, Growth, and the
Balance of Payments: Essays in Honor of Gotifried Haberler
(Rand McNally, 1965), pp. 53-67.
More on the Equivalence of Tariffs and
Quotas, American Economic Review (March 1968),
pp. 142-46.
_______
iSM~,aev,ccno,
IAOV 1C~,t1
46
Internafiona/
U.S. Department of Commerce, Bureau of the Census.Statistical Abstract of the United States: 1988 (GPO,
1987).
U.S. International Trade Commission. Qperation of the Trade
Agreements Program39th Report, 1987 (USITC, July
1988).