Technical Barriers to Trade (TBT) do not only protect the health, safety and satisfaction of consumers but also present a challenge for export oriented producers.
Every country faces the demand of its people to ensure the supply of safe consumer goods. Furthermore many see that it is the responsibility of the state to secure the protection of human, animal and plant life as well as national security and the environment. As the understanding of “safe” consumer goods and the need for protection differs significantly between countries, also the policies implemented by governments vary. Being required to meet these varying national provisions, it is difficult and cost intensive for exporters and producers to achieve compliance. At the same time, standards and technical regulations can be misused to protect domestic producers and therefore serve as an excuse for protectionism, becoming obstacles to trade.
To ensure that regulations, standards, testing and certification procedures do not become unnecessary obstacles, the member countries of the World Trade Organisation (WTO) agreed to include the Agreement on Technical Barriers to Trade (TBT) in the regime of the WTO. Within the WTO regime the Agreement on TBT stands beside other agreements like the GATT, GATS or TRIPS. It is closely aligned with the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS), which relates to food safety (bacterial contaminants, pesticides, inspection and labelling) as well as animal and plant health (phytosanitation) with respect to imported pests and diseases.
Plainly said, TBT are a set of rules regulating e.g. product weight, size, packaging, ingredients or identity standards, mandatory labelling, shelf-life restrictions, and import testing and certification procedures. In recognition of the diversity of people and nations and their different conception of consumer safety, the TBT Agreement seeks to provide member countries with sufficient domestic policy autonomy to pursue legitimate regulatory objectives. It counterbalances these granted autonomies with several provisions aiming on limiting harmful regulation. To prevent exporters from being confronted with a vast variety of different regulations and standards, governments are strongly encouraged to adhere to international standards. As it is the case with other agreements within the WTO, the most favoured-nation provision prevents regulations that aim at the protection of domestic industries.
TBT Commitments of Nepal
Besides provisions regulating the trade in goods, services and aspects of intellectual property rights (IPR), the TBT agreement was one of the mandatory obligations of the WTO that Nepal adopted with the WTO accession package on 23rd April 2004.
Nepal made the following commitments under the TBT Agreement during its accession to the WTO
• The Amendment of Nepal Standards (Certification Mark) Act, 1980.
• The Amendment of Nepal Standards (Certification Mark) Regulations, 1982.
• The establishment of an Enquiry Point.
So far, the government has designated the Nepal Bureau of Standards and Metrology (NBSM) as TBT enquiry point. The national enquiry points are responsible for the provision of information about the country’s technical regulations, test procedures, and adherence to various international standards. The amendment of the Nepal Standards (Certification Mark) Act and Regulation is currently under consideration.
Besides being responsible for the establishment of national standards and technical requirements and maintaining laboratories for quality tests, the NBSM monitors the implementation process of TBT related amendments of Nepal’s provisions and acts as focal point in the WTO accession process. Since its establishment, the NBSM has been notifying and publishing information regarding TBT which includes national and international notice of standards, technical regulations and conformity assessment procedures and other relevant information.
Challenges and Chances of TBTs for Nepal
An insufficient level of awareness about TBT provisions within the public and the private sector has limited the export of quality products to foreign markets and encouraged the import of low quality products to the domestic market.
Most countries worldwide are using their right to restrict unsafe and low quality products from being imported by strict standards and technical requirements that are enforced by customs. Nepalese producers often face difficulties to attain these. Problems often arise because there are no internationally accredited testing laboratories in Nepal which may be able to issue the required quality documents. Because of the lack of these facilities, it is difficult for producers in Nepal to guarantee a specific quality and to achieve compliance with the high standards and requirements for exports to developed countries. The creation of an adequate quality infrastructure is essential in the acquisition of buyers from abroad.
Chambers of commerce and industry and product associations could assist exporters through the provision of information about TBT in developed countries, and support the establishment of adequate testing laboratories. Awareness programmes for exporters in different parts of the country about the importance and impact of various provisions of the TBT Agreement for exporters could increase the producers’ abilities to tackle such challenges effectively.
Chambers of commerce and industry and product associations could assist exporters through the provision of information about TBT in developed countries, and support the establishment of adequate testing laboratories. Awareness programmes for exporters in different parts of the country about the importance and impact of various provisions of the TBT Agreement for exporters could increase the producers’ abilities to tackle such challenges effectively.
The GoN is currently preparing to promulgate an Accreditation Act that includes the formation of an Accreditation Board. It will be the board’s responsibility to foster the recognition of Nepalese laboratories by other countries.
On the other hand, Nepal can use the provisions of the Agreement on TBT to protect its own consumers and industries against low quality and potentially harmful products from other countries. So far, the lack of sufficient infrastructure at the borders and inadequate TBT policies, have allowed low quality products to enter the domestic market. Training of customs officials and the provision of information is essential to address these problems.
TBT and Tea
The Agreement on Application of Sanitary and Phytosantinary(SPS) Measures that deals with food items is especially relevant for tea producers in Nepal that are exporting their goods to markets abroad. Tea is classified as food in many countries and therefore SPS measures apply for the import of tea. They take into account radiation level, pesticide maximum residue level, heavy metal contents, and microbial contamination, among others. Especially for Nepalese tea exporters it is challenging but essential to guarantee compliance
with these measures.
Conclusion
Consumers in Nepal can benefit greatly from the adoption of the measures provided by the agreement on TBT. Effective standards and regulations not only protect the health and well being of the consumers, but also benefit local producers that are not able to underbid the low prices of low quality and harmful products and therefore suffer from unfair competition. Exporting producers in Nepal benefit from the compliance with TBT not only by gaining access to high-demand markets in the developed countries but also by gaining the trust of consumers abroad.
Rup Kumar BK and Dominik Berger
May, 2012
This article was published in Nepal Trade Magazine, Issue 3, May 2012, GIZ
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