What are NTMs?

T he term non-tariff measures is a very broad definition of all measures other then standard tariffs in trade policy. NTMs include behind the border measures that affect trade between countries. The Multi-Agency Support Team (MAST) (Food and Agriculture Organization of the United Nations (FAO), International Monetary Fund (IMF), International Trade Centre (ITC), Organisation for Economic Co-operation and Development (OECD), United Nations Industrial Development Organization (UNIDO), World Bank and World Trade Organization (WTO) and individuals that work together on the classification of NTMs) has been developing a classification of NTMs that provides an excellent overview of the measures that are included in the definition.

Governments have been using specific technical measures, such as sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT) for example, to tackle the issue of incomplete or asymmetric information between buyers and sellers in the market, and/or quality issues. These and other NTMs are imposed for legitimate reasons, while in some cases also imposed for protectionist reasons. Given the public policy goals, NTMs cannot be simply negotiated away in the efforts of trade liberalisation but instead are addressed in deep and comprehensive trade agreements across countries or groups of counties, including the WTO agreements.

NTMs are governmental measures rather than standards and requirements that the private sector uses in business to business or business to consumer relations. NTMs are described in the regulatory body of countries and as such applies to domestic products as well as to foreign products that are sold on the domestic market.

It can in general be argued that some NTMs promote trade rather than restrict trade. NTMs could have both effects, such as a safety standard which is costly to meet but allays consumer concerns over the product’s quality.

The trade-restricting effect of NTMs has mainly been analysed, usually focusing on the costs of NTMs. Often, the term non-tariff barriers (NTBs) was synonymously used for such measures, indicating their potentially negative effect while neglecting the positive effect. For a balanced sound analysis, both effects would need to be considered and the neutral term NTMs should be used.