The Issue with NTBs

1. The Issue with NTBs • As the demand for liberalization of tariff regime continues to reduce market protection, many countries are resorting to the use of NTBs to regulate import flows or for the purposes of guaranteeing health and safety of their consumers.

2. The Challenge for Africa • Africa has been the beneficiary of market access either at MFN level or in the context of Preferential Trade Agreements (PTAs). • However, it is on record that utilization rates of preferences are minimal owing to the restrictive nature of the NTBs. • As beneficiaries of the preferential schemes, NTBs are increasingly becoming one of the main market access concerns. • It is crucial that they are addressed in the negotiations as whatever gains made through tariff concessions may be nullified by the incidences of this form of market access barriers.

3. Summary of Key Proposals I. MINISTERIAL DECISION ON PROCEDURES FOR THE FACILITATION OF SOLUTIONS TO NON-TARIFF BARRIERS II. NEGOTIATING PROPOSAL ON NON-TARIFF BARRIERS IN THE CHEMICAL PRODUCTS AND SUBSTANCES SECTOR III. UNDERSTANDING ON THE INTERPRETATION OF THE AGREEMENT ON TECHNICAL BARRIERS TO TRADE AS APPLIED TO TRADE IN FIREWORKS IV. UNDERSTANDING ON THE INTERPRETATION OF THE AGREEMENT ON TECHNICAL BARRIERS TO TRADE AS APPLIED TO TRADE IN LIGHTER PRODUCTS V. DECISION ON THE ELIMINATION OF NON-TARIFF BARRIERS IMPOSED AS UNILATERAL TRADE MEASURES VI. UNDERSTANDING ON THE INTERPRETATION OF THE AGREEMENT ON TECHNICAL BARRIERS TO TRADE AS APPLIED TO TRADE IN ELECTRONICS VII. REVISED SUBMISSION ON EXPORT TAXES

4. VIII. UNDERSTANDING ON THE INTERPRETATION OF THE AGREEMENT ON TECHNICAL BARRIERS TO TRADE WITH RESPECT TO THE LABELLING OF TEXTILES, CLOTHING, FOOTWEAR, AND TRAVEL GOODS IX. PROTOCOL ON TRANSPARENCY IN EXPORT LICENSING TO THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994 X. DECISION ON NON-TARIFF BARRIERS AFFECTING FORESTRY PRODUCTS USED IN BUILDING CONSTRUCTION XI. AGREEMENT ON NON-TARIFF BARRIERS PERTAINING TO THE ELECTRICAL SAFETY AND ELECTROMAGNETIC COMPATIBILITY (EMC) OF ELECTRONIC GOODS XII. MINISTERIAL DECISION ON TRADE IN REMANUFACTURED GOODS XIII. AUTOMOTIVE NTBS

5. WORKSHOP ON WTO NAMA NEGOTIATIONS ON NON-TARIFF BARRIERS12th-14th April 2010Nairobi, Kenya

6. UNIDO’S ROLE IN ADDRESSING TRADE CONSTRAINTS Andrew EDEWA United Nations Industrial Development Organization (UNIDO)

7. UNIDO VISION & CORPORATE STRATEGY UNIDO VISION To reduce poverty in countries with developing or transition economies through sustainable industrial growth UNIDO CORPORATE STRATEGY Developing Industry: Productivity Enhancement for Social Advancement within the framework of UNIDO’s three thematic priorities

9. UNIDO’s Trade Capacity Building Programme • The technical ability of developing countries to produce competitive exportable products that comply with international standards is key to their successful participation in international trade • UNIDO is one of the largest providers of trade related services, offering focused advice and integrated technical cooperation in the areas of • competitiveness, • industrial modernization and upgrading, • Compliance with trade standards, • testing methods and • metrology.

12. KEY INTERVENTIONS NEEDED TO PROMOTE SUSTAINABLE DEVELOPMENT • Capacity building in the public sector to ensure informed and timely trade-related policy making • Strengthening the domestic private sector, improving competitiveness and the supply capability of enterprises • Establishing/strengthening institutions/ infrastructure that are part of the enabling environment for effective trade participation • Promoting consumer, environmental and health protection during the process of globalization

13. UNIDO 3Cs approach. These tools are based on accumulated expertise and knowledge of challenges and opportunities of developing countries in the process of integration in the MTS with regards to their: • Supply-capacity; • Ability to comply with growing market demands in terms of standards and conformity assessment; • Capacity to access national, regional and international markets

14. “Countries must have marketable products to trade” COMPETITIVITY of productive capacities • “Products must conform to requirements of clients and markets”  CONFORMITYwith standards • “Rules for trade must be equitable and customs procedures harmonized”  CONNECTIVITY to markets UNIDO 3Cs approach.

15. UNIDO TCB- Key Focus Areas • Supply side development (UNIDO) • Industrial policy and supportive institutional structure • Investment and technology transfer • SME development and access to finance • Cluster and export consortia development • Productivity and quality • Industrial Upgrading, sectoral technology support • Cleaner Production, energy efficiency • Standards & Conformity Assessment/Compliance (UNIDO) • Development and harmonization of standards • Development of testing services , PT Schemes • Certification (products and enterprise systems) • Metrology/Calibration chain • Accreditation schemes • Integration in to the MTS (WTO, UNCTAD, ITC, WB…) • Market access and linkages with buyers/markets • WTO rules, negotiations • Trade facilitation (customs, documentation) • Infrastructure (transport, ports) Compete Conform Connect

16. Partnerships To respond to: growing demand for greater coherence and to the Paris Declaration on Aid Effectiveness, UNIDO is increasingly cooperating with and associating other bilateral and multilateral organizations in the needs assessment and project development and implementation process such as the WTO, ITC, UNCTAD, STDF, World Bank etc.

17. We have established strategic partnerships with international standards, measurement, accreditation and research organizations, including: • International Organization for Standardization (ISO), • International Laboratory Accreditation Cooperation (ILAC), • International Accreditation Forum (IAF), • International Bureau of Weights and Measures (BIPM) and • International Organization of Legal Metrology (OIML) • World Associations of Industrial and Technological Research Associations WAITRO…… In addition, UNIDO is a founding member of the Joint Committee on Coordination of Assistance to Developing Countries in Metrology, Accreditation and Standardization (JCDCMAS).

18. UNIDO-WTO MoU Module I Module II Module III Remove supply side constraints Prove Conformity with Technical Requirements Integrate into the multilateral trading system Introduce supporting legislation, policies and institutional reform Strengthen supply capacity to improve competitiveness Set up accreditation/ certification systems Support compliance with international standards Strengthen capacity for implementation of the WTO agreements and trade negotiations UNIDO WTO Pilot Countries: Armenia, Bolivia, Cambodia, Cuba, Egypt, Ghana, Jordan, Kenya and Mauritius.

19. Conformity Assessment Structure User User User User User Peer Evaluation MRA Pre-Peer Accreditation Bodies Accreditation Mutual Recognition Calibration, Testing Laboratories and Inspection Bodies Analytical, Calibration, Testing Laboratories and Inspection Bodies

20. Joint Committee on Coordination of Assistance to Developing Countries in Metrology, Accreditation and Standardization UNIDO ITU-T IAF OIML IEC JCDCMAS BIMP ILAC ISO ITC

21. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS1. Context specific needs assessment

22. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS1. Context specific needs assessment Based on the request for the formulation of a project, UNIDO undertakes context-specific desk research as well as a preparatory/needs assessment missions to clearly identify the challenges at the level of: • government policy and regulatory framework (TBT/SPS, bilateral); • institutional capacity specifically in the quality-related institutions dealing with Standards, Metrology, Testing and Quality (SMTQ); • sector(s)/value chains; and • d) enterprises. The desk research involves the review of available diagnostic studies: • UNIDO competitiveness/technology studies (global/regional/country/macro/sectoral/value-chain/product) • DTIS (Diagnostic Trade Integration Study) • PRSPs (Poverty Reduction Strategy Papers) • Export Development Strategies, as well as any specific needs evaluations and technical assessment done previously by UNIDO or other institutions.

23. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS1. Context specific needs assessment The preparatory assistance often involves assessment of: • Relevant legal and institutional framework • SMTQ institutions in the country • Collection of baseline data on the quality of targeted products, • Quality and quantity of services provided by the relevant testing laboratories and other service providers (sustainability), • Value-chain analysis of the sectors identified as strategic or requiring support; • Diagnostic of group of enterprises and service providers • Needs of conformity to standards

24. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS2-2. 2. Trade Related Challenges Surveys at the enterprise level

25. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS2-2. Trade Related Challenges Surveys at the enterprise level UNIDO has developed a methodology for enterprise-level surveys on “Trade Related Challenges Faced by Exporters” aimed to: Qualify and quantify the problems exporters in developing countries are facing in the regional and international trade environment, by: • Identifying common trade barriers related to: • Supply side, • Standards and conformity assessment • Integration into the multi-lateral trading system 2. And reviewing the possibilities of overcoming these obstacles through Trade Related Technical Assistance and Capacity Building (TRTA/CB)[1] [1] For example please refer to : http://www.unido.org.lb/macle/downloads/macle_presentation.pdf or http://www.un.org.pk/unido/trta-interventions.html.

26. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS2-2. Trade Related Challenges Surveys at the enterprise level • the survey aims to: • Explore the nature and extent of challenges to the trade capacity of exporters in the respective country. • Determine the factors associated with standards compliance across sub-sectors. • Assess the impact of technical standards and regulations on the value of export sales. • Identify mechanisms through which export performance could be enhanced.

27. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS2-2. Trade Related Challenges Surveys at the enterprise level Based on the methodology developed, pilot surveys have been carried out in various countries (including Armenia, Bahrain, Cambodia, Jordan, Guinea, Ghana, Kenya, Lao PDR, Lebanon, Pakistan, Sri Lanka, Vietnam, and also initiated in Bangladesh, Bhutan, India, Libya, Maldives, and Nepal) from different geographical areas, on different levels of economic development and having different economic structures.

28. EXAMPLE: UNIDO BT SURVEY of 100 food exporters 2004 (new 2007) • TOP 4 PROBLEMS: • Price Competition (internal and external) • tests certificates (recognition of local labs) • Trade facilitation (affecting import/export) • Tariffs LOST ORDERS 42% of respondents (food processors) lost orders in the last few years due to barriers to trade

29. STANDARDS AND TESTING • Tests and certificates from local labs: 52% • Access to standards information 29% • Compliance with standards (import) 15% ADMINISTRATIVE AND BUREAUCRATIC OBSTACLES (TRADE FACILITATION) • Irregular additional payments I/E: 46% • Custom formalities 37% • Improper administrative practices 31% EXAMPLE: UNIDO BT SURVEY of 100 food exporters 2004 (new 2007)

30. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS3. Key Export Sectors Supply-Side constraints – UNIDO Competitiveness Analysis Tool

31. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLSKey Export Sectors Supply-Side constraints – UNIDO Competitiveness Analysis Tool • Since 2004, UNIDO has been building up a competitiveness analysis programme to help countries identify: • Sectors and products with competitive potential • Supply-driven obstacles affecting their export growth. UNIDO’s approach in the competitiveness analysis programme is to build the institutional capacity of national counterparts through: • Awareness raising, • Training, • Transfer of databases and methodologies, • Creation and supervision of specialised inter-institutional units in key Ministries and Chambers.

32. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLSKey Export Sectors Supply-Side constraints – UNIDO Competitiveness Analysis Tool • Nation-wide assessment of trade and industry competitiveness. It positions the country in the international industrial scene and analyses the factors that drive national manufacturing growth; • Value chain analysis of key strategic sectors. It identifies high value-added stages in the production process and the conditions under which a country can benefit from specialisation. It also analyses the potential markets for export; • Product analysis methodology for trade negotiations. It gives negotiators an objective tool to identify potential winning and vulnerable products in trade agreements; • Cost and transactions of doing business.It presents the framework conditions that influence investment decisions in key strategic sectors (e.g. labour and other industrial costs, infrastructure and logistics, laws and regulations, institutional arrangements, incentives in industrial zones, trade agreements, etc.); • Industrial Observatory.It gives on-line access to all indicators of trade and industry competitiveness (both national and sectoral) to benchmark a country’s performance against main competitors, role models and global threats.

33. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS4- Analysis of Quality Infrastructure Constraints

34. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS4- Analysis of Quality Infrastructure Constraints • Specific DCs’ Conformity Assessment Problems • Poor physical facilities/infrastructure • Inefficient institutional set up (Standards and conformity assessment functions, if existent, are scattered among too many institutions) • Labs established (even with donor support) are neither sustainable, nor related to demand • Donation of equipment with poor planning, training, and lacking adequate local physical infrastructure/staff, absorption capacity

35. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS4- Analysis of Quality Infrastructure Constraints • Specific DCs’ Conformity Assessment Problems • Lack of funding • Lack of demand • Low-level of manufacturing due to focus on commodities • Exposed to barriers to trade especially SPS measures • Poor and uneven quality of local products • National quality infrastructure lacks credibility, and tests and certificates by local laboratories are not recognized in export countries.

36. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS4- Analysis of Quality Infrastructure Constraints Why a CA Infrastructure is Necessary for DCs • To reduce the risk that domestic markets become a dumping ground for sub-standard and unsafe products. • To ensure protection of the environment and achieve higher social responsibility. • To improve consumer safety related activities (availability of testing facilities, particularly microbiological and chemical testing laboratories and legal metrology). • To facilitate trade, access to export markets, and generate hard currency. • To increase custom revenue generation.

37. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS4- Analysis of Quality Infrastructure Constraints Why a CA Infrastructure is Necessary for DCs • To overcome risk of rejection of products in export markets due to lack of conformity (TBS and SPS). • To prevent unscrupulous traders from taking advantage of a poor QC infrastructure, an enforced legal system for inspection and custom control is necessary. • To allow integration of producers/traders in the global economy • To help the private sector to solve quality, compliance and certification problems hampering its aspiration to gain access to export markets and avoid multiple testing.

38. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLSAnalysis of Quality Infrastructure Constraints In its efforts to contribute to make the Aid for Trade initiative a success for Africa, UNIDO elaborated a questionnaire to identify the gaps and assess the specific needs of African countries in the field of quality infrastructure[1]: • Quality promotion, • Metrology, • Accreditation, • Standardisation • Conformity assessment To allow better elaboration of trade capacity building projects at the national and sub-regional levels. [1]See for example: http://www.unido.org/file-storage/download?file_id=81710. 

39. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS4- Analysis of Quality Infrastructure Constraints The UNIDO survey of the existing situation of quality infrastructures was the basis for the elaboration of an Action Plan for Africa to: • Address the weaknesses of the infrastructure • Build trade capacity in African countries • Improve the prospects of economic development on the continent. The findings of this survey and the proposed UNIDO action plan were presented and discussed during the “Standards Compliance and Conformity Assessment for the Development of Sustainable Trade in Africa” Expert Group Meeting organized jointly with the African Union (AU) and held in Tunis in February 2007.

40. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS4- Analysis of Quality Infrastructure Constraints Building up on the initial survey, which covered 32 African Countries, UNIDO is currently updating the already received data while expanding at the same time the scope as well as the geographic coverage - Besides Africa, the current survey includes Asia, the Pacific Island States as well as the Arab region. In particular the survey aims to: • Assess the priority needs for quality infrastructure upgrading •  Advocate more effective technical assistance •  Develop tailored projects for countries and sub-regions

41. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS4- Analysis of Quality Infrastructure Constraints LABNET provides access and dissemination of laboratory and activity information to its users. LABNET is under the umbrella of the UNIDO, and its primary function would be to provide information to the laboratories and the persons associated with the laboratories. The LABNET is covering the testing and calibration laboratories from all fields of science and have a wide database to cover all laboratories both accredited and non-accredited from all regions of the globe. LABNET Vision Provide access and dissemination of laboratory and activity information Share experience with respect to laboratory design, management, development, maintenance, capabilities Interaction and response in various issues related to PT, CRM, traceability, trade related issues Avenue for promotion / sourcing of laboratory and related services Facilitate information to industry / trade on testing / calibration and product specific information PARTNERS UNIDO, WAITRO, Vinta Labs, India

42. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS5- Analysis of developing countries product refusals/notifications

43. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS5- Analysis of developing countries product refusals/notifications Starting from the analysis of product refusals/notifications for developing countries originated by: 1-The United States Food and Drug Administration (US-FDA), 2-European Union Rapid Alert System for Food and Feed (EU-RASFF) and 3-Japan (Ministry of Health, Labour and Welfare) UNIDO worked out an enhanced classification of Non-Tariff Measures (NTMs)/Non-Tariff Barriers (NTBs) to trade.  

44. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS5- Analysis of developing countries product refusals/notifications The classification was developed in the context of the Multi-Agency Support Team established by the Group of Eminent Persons on Non-Tariff Barriers (MAST) through the SPS/TBT Sub-Groups with the participation of several international organizations (Codex Alimentarius, FAO, ITC, OECD, UNCTAD, WTO, US-ERS, and US-ITC) led by OECD and UNIDO. UNCTAD, UNIDO and ITC in cooperation with other MAST members (IMF, FAO, OECD, WTO, WB) launched in 2007 a Pilot Project on Collection and Quantification of Non-Tariff Measures (NTMs) Database (UNCTAD-DITC Draft, 18 July 2007).

45. UNIDO CAPACITY EVALUATION AND NEEDS ASSESMENT TOOLS5- Analysis of developing countries product refusals/notifications Aimed at developing a systematic methodology of definition and collection of Non-Tariff Measures (NTMs) the project covers nine pilot countries (Brazil, Chile, India, Kenya, Mozambique, Philippines, Switzerland, Thailand and Zambia). The objective is to initiate a country level data collection on NTMs that will help MAST to draw up an analytical framework to carry out a multi-agency effort in data collection process and prepare studies on the impact assessment of NTMs.

46. Demand and Channels of Communication

47. Demand and Channels of Communication With regards to the demand for advisory services and technical assistance, UNIDO projects are developed through communications received via different channels, among them: • Government requests for TBT/SPS-related TRTA to cover legal framework, institutional and human capacity and physical infrastructures; • Requests by business associations such as national/sectoral industrial associations, chambers of commerce and industry, trade groups, clusters or local institutions such as standards bodies, certifiers, inspection bodies, laboratories; • Identification of new standards or conformity assessment procedures which might have a significant impact on developing countries’ export or import; • Request for action to overcome problems when products are banned to export due non compliance; or • Assistance required in the process of bilateral, regional or multilateral trade negotiations.

48. Demand and Channels of Communication • Donors are associated with the project development process from the initial phase. UNIDO allocates seed money either: • to carry out the initial needs assessment • Or • to contribute to trouble-shooting actions tackling urgent problems and requests. • The UNIDO methodology for needs assessment involves both desk research and field work and it is supported by the UNIDO field representation system covering over 70 countries through UNIDO national/regional offices/desks and technical networks which include: • National Cleaner Production Centres, • Technology Centres, • Investment and Partnership Promotion Offices and Units • Sub-Contracting Exchanges.

49. The Market linkage Challenge can be met provided we avoid the 7 Sins The sins are: “wealth without work, pleasure without conscience, knowledge without character, COMMERCE WITHOUT MORALITY, science without humanity, worship without sacrifice, and politics without principle”. M. Gandhi

50. Thank You for your attention!