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Philippine experience of firm survey of NTMs

Gloria O. Pasadilla, PhD Research Fellow ADB Institute. Philippine experience of firm survey of NTMs. October 25-26, 2010 Vientiane, Laos. Outline. Background info on the project and NTMs Survey instruments, NTM classification Results for the Philippines Experience of exporters

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Philippine experience of firm survey of NTMs

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  1. Gloria O. Pasadilla, PhD Research Fellow ADB Institute Philippine experience of firm survey of NTMs October 25-26, 2010 Vientiane, Laos

  2. Outline • Background info on the project and NTMs • Survey instruments, NTM classification • Results for the Philippines • Experience of exporters • Collected info on RP NTMs • Notes of experience in data collection

  3. NTM survey project: an attempt to understand trade difficulties from the point of view of firms Global liberalization process was like ‘“draining a swamp” with the “lower water level revealing all the snags and stumps of non-tariff barriers that still have to be cleared away”.’ (Baldwin) Best source: firms themselves

  4. Problem of definition • NTMs : measures other than tariff; usually ‘Within border’ measures; most common are regulations and standards that affect trade • Not all NTMs are NTBs • difficult to determine when a measure is a trade barrier • But whether it is an NTM or NTB, the measure increases trade costs =>similar effect on trade as tariffs: higher price, lower trade volume • Tentative effort to differentiate ntm and ntb using survey (more of this later)

  5. How to proceed with survey Important to understand the typology of NTMs based on UNCTAD’s classification (see next slides)

  6. Classification of NTM A000 SANITARY AND PHYTOSANITARY B000 TECHNICAL BARRIERS TO TRADE C000 OTHER TECHNICAL MEASURES D000 PRICE CONTROL MEASURES E000 QUANTITY CONTROL MEASURES F000 PARA-TARIFF MEASURES G000 FINANCE MEASURES H000 ANTI-COMPETITIVE MEASURES I000 EXPORT RELATED MEASURES J000 TRADE-RELATED INVESTMENT

  7. A000 SANITARY AND PHYTOSANITARY MEASURES B000 TECHNICAL BARRIERS TO TRADE C000 OTHER TECHNICAL MEASURES D000 PRICE CONTROL MEASURES E000 QUANTITY CONTROL MEASURES F000 PARA-TARIFF MEASURES G000 FINANCE MEASURES H000 ANTI-COMPETITIVE MEASURES I000 EXPORT RELATED MEASURES J000 TRADE-RELATED INVESTMENT MEASURES K000 DISTRIBUTION RESTRICTIONS* L000 RESTRICTION ON POST-SALES SERVICES* M000 SUBSIDIES* N000 GOVERNMENT PROCUREMENT RESTRICTIONS* O000 INTELLECTUAL PROPERTY* P000 RULES OF ORIGIN* A100 Voluntary standards, A200 Sanitary and phytosanitary regulations, A300 Conformity assessment related to SPS, and A900 Sanitary and phytosanitary measures, n.e.s. First and second level of disaggregation

  8. A210 Labelling, Marking and Packaging requirements, A220 Traceability requirements, A230 Tolerance limits for residues and contaminants, or restricted use of certain substances, A240 Regulation of foods or feeds derived from or produced using GMO, A250 Hygienic requirement, A260 Disease prevention measures, A270 Regulations on productions processes, A280 Geographical restrictions, and A290 Sanitary and Phytosanitary regulations n.e.s. A100 Voluntary standards, A200 Sanitary and phytosanitary regulations, A300 Conformity assessment related to SPS, and A900 Sanitary and phytosanitary measures, n.e.s. Second and third level of disaggregation

  9. Understanding Procedural Obstacles Preliminary effort to differentiate NTBs from NTMs through procedural obstacles. Survey contains questions on: A. Arbitrary or inconsistent behaviour: B. Discriminatory behaviour favouring specific producers or suppliers: C. Inefficiency or cases of outright obstruction consisting of: D. Non-transparent practices consisting of: E. Legal obstacles consisting of: F. Unusually high fees or charges

  10. Procedural obstacles: first and second level of disaggregation C1: Too much documentation or forms to be supplied or completed C2: Too strict, too detailed or redundant testing/certification or labeling requirement C3: Substantial delays in obtaining authorization/approval C4: Complex clearing mechanism such as a need to obtain approval from several entities C5: Short submission deadlines to supply information C6: Outdated procedures such as lack of automation C7: Lack of resources such as understaffing or scarce equipment in destination market • A. Arbitrary or inconsistent behaviour: • B. Discriminatory behaviour favouring specific producers or suppliers: • C. Inefficiency or cases of outright obstruction consisting of: • D. Non-transparent practices consisting of: • E. Legal obstacles consisting of: • F. Unusually high fees or charges

  11. How to proceed with survey • 1. Important to understand the typology of NTMs based on UNCTAD’s classification (see next slides) • Smooth-sailing in doing survey rests in internalizing what the classifications and procedural obstacles mean. • Training of interviewers • ‘group processing’ after a few interviews • Learning-by-doing process

  12. Next issue: sample selection • Philippines Frame: registered exporters • Target export sectors with likely large NTM experiences • Not necessarily reflective of export structure that is dominated by electronic exports (60%) • Two phases: Metro Manila, Regions (General Santos, Cebu, Davao) • Other countries may use different sample that may be reflective of export structure

  13. How to understand the survey result • Firms asked about NTM experiences: • Specific product • Destination market • Specific NTM and Procedural obstacles encountered • Unit of observation: firm-product-ntm-destination • Philippines Total: 812 observations out of 303 firms interviewed

  14. Results: Sample Characteristics

  15. Sample Characteristics Foreign vs. Local Length of Operation Size

  16. Survey of Collected Cases from Exporters

  17. Which NTMs are widely experienced?

  18. Of the SPS and TBT Measures, which is most prevalent? Table II.6 Detailed Incidence for SPS and TBT

  19. Table II.8 Detailed Table for A, C and F Procedural Obstacles

  20. Incidence by economic sectors Which products are most subjected to NTMs? Result here may be a function of the sample survey, that is, large representation of manufacturing products

  21. Top Countries for which cases have been reported Table 11.9

  22. Top Ten Countries’ Cases by NTM Category Result implies that developing countries also have large number of SPS or export related measures, etc. Table II.10a:

  23. Product incidence, selected countries Table II.15

  24. Incidence by product

  25. Table II.14: Incidence on Exports per NTM Category

  26. Firms’ perception of sanitary and technical regulations

  27. Firms’ perception of sanitary and technical regulations

  28. Firms’ perception of sanitary and technical regulations

  29. Problems encountered during data collection • Familiarity with classification takes time; skill required in asking ‘leading’ questions • Sample selection: trade structure • More SMEs rather than large companies: no time and interest • Incentive for companies – more complaints on domestic regulations rather than destination market because of perception that survey will help change domestic policies

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