WORLD TRADE
ORGANIZATIONTN/MA/W/4/Add.1
4 March 2003
(03-1241)
Negotiating Group on Market Access Original:  English
SCOPE OF THE NEGOTIATION ON NON-TARIFF BARRIERS
Modalities
Submission by New Zealand
Addendum
The following communication, dated 17 February 2003, has been received from the
Permanent Mission of New Zealand.
_______________
Introduction
1. Recent proposals, including from New Zealand and the US, underline the movement towards
a post-tariff global trading environment.  The Negotiating Group on Market Access (NGMA) must
therefore deliver substantive results on non-tariff ba rriers (NTBs) in order to provide market access
improvements, which are meaningful for business a nd contribute to sustainable economic growth in
all economies.
2 The group faces difficulty in identifying how to shape a manageable negotiation on NTBs that
will deliver these results.
- New Zealand’s earlier submission (TN/MA/W/4) drew attention to the potentially wide scope
of such a negotiation.  The OECD’s survey of NTBs refers to more than 7500 claims or
complaints which provide information about the existence of NTBs (TD/TC/WP(2002)3),
based on the annual trade reports of the EU, Japan and US and other surveys.
- New Zealand’s notification on NTBs, submitted on 5 February 2003, also illustrates the
extent of such barriers .
3 It is likely that a significant proportion of these NTBs are arguably covered by at least some
existing WTO provisions.4 An issue for this group therefore is how to handle such measures.  They may or may not be
WTO legal.  But that can only be definitely determined through the dispute settlement system.  We
doubt that Members maintaining measures, which are arguably, covered by existing WTO provisionswill join a consensus in this negotiation to agree that the measures are WTO illegal.
5 It is helpful at this point to recall the mandate from Ministers, which is to “reduce or as
appropriate eliminate… non-tariff barriers (NTBs), in particular on products of export interest to
developing countries”.  The issue of the legal status of an NTB is obviously a consideration in a rules-
based organisation such as the WTO.  But it is not identified as the defining factor in the mandate.  ByTN/MA/W/4/Add.1
Page 2
analogy with tariffs, which are certainly WTO legal measures, the Negotiating Group’s mandate is
simply to reduce or eliminate the incidence of non-tariff barriers.
6 That said, many NTBs are linked to legitimate public policy objectives, for example health,
safety or environmental protection, and may be in place for valid regulatory reasons.  It is thereforenot feasible simply to reduce or eliminate an arbitrary proportion of such measures.  But given the
Ministerial mandate, neither can negotiators avoid addressing them.  Some of these measures impose
unnecessary costs on business and consumers or distortions to trade.  This is especially the case where
the differences or variation in for example product mandatory standards (i.e. technical regulations)
and procedures for assessing compliance with those technical regulations (i.e. conformity assessment)
among major global markets itself imposes significant costs on business.  In line with the mandate,
the Negotiating Group on Market Access does need to seek effective ways to reduce or eliminate theNTBs which cause those costs.
7 New Zealand suggests the NGMA needs to consider various ways to advance.  This paper
proposes some possible approaches, as a contribution to the development of modalities for negotiation
on NTBs, which are to be agreed by 31 May 2003.
Modalities: possible approaches
8 One way would be to leave measures for dispute settlement .  That may be necessary in some
instances, though it plainly would not discharge the mandate.
9 A second approach would reflect the fact that some areas are already covered under other
parts of the Doha mandate , eg. the work currently being done on trade facilitation in the Council for
Trade in Goods (CTG).  The Council’s existing manda te in the period up to Cancun is to review and
as appropriate improve and clarify relevant GATT Articles.  Negotiations on trade facilitation are to be
launched at Cancun on the basis of a decision, by explicit consensus, on the modalities for those
negotiations.  The importance of substantive progress in this work on trade facilitation is apparent
from the recent notifications of NTBs, by New Zealand, and other participants, which illustrate that
customs and entry procedures are among the most  frequently cited NTBs.  The NGMA therefore
needs to follow closely progress in the work on trade facilitation under the CTG.
10 Another possible approach to handling NTBs, noted in New Zealand’s earlier submission,
would be bilateral request/offer (R/O).  We suspect that R/O may prove necessary as a fallback for
some measures.  But New Zealand would caution against making R/O the main modality for NTBs.
Given the large membership of the WTO, the potentially huge number of NTBs as noted earlier, andthe complexity of each individual issue, an approach solely based on bilateral R/O negotiations group
would be likely to yield relatively limited result s.  That would imply a limited discharge of the
mandate.
11 New Zealand suggests that to achieve substantial progress on the NTB part of the mandate,
this Negotiating Group will also need to consider multilateral approaches.  In this paper we share
some preliminary ideas about possible approaches based on examples of technical regulations (i.e.mandatory standards), procedures for assessing whet her products comply with those regulations (i.e.
‘conformity assessment’), and quantitative restrictions.  The reference to mandatory standards and
conformity assessment reflects the fact that standards and certification ranked at the top of the seven
categories of NTBs identified in New Zealand’s earlier submission to the NGMA.  These types of
NTBs are prominent in the New Zealand notification of the NTBs faced by our exporters.
12 Within such a multilateral approach, there are various ways in which NTBs, especially those
relating to technical regulations and conformity assessment, might be tackled.TN/MA/W/4/Add.1
Page 3
13 One approach would be to strengthen the application of existing horizontal disciplines .
For example, the TBT Agreement already requires technical regulations to be specified in terms of
performance wherever appropriate.1 In practice technical regulations are often described in
prescriptive terms rather than in terms of product  performance.  (See example below from the forest
products sector.)  New Zealand suggests the negotiati ons should explore ways to strengthen horizontal
disciplines by requiring a substantial increase in the proportion of Members’ technical regulations to
be performance based rather than based on product descriptions, and to provide some security that
those performance based regulations will be maintained.  In New Zealand’s experience performance
based standards are well received by the business sector because they result in technical efficiencies
and consequently improved productivity levels.
PRESCRIPTIVE VERSUS PERFORMANCE-BASED TECHNICAL REGULATIONS
IN THE FOREST PRODUCTS SECTOR
An August 2002 study for the APEC Business Advisory Council on the economic impact of
prescriptive building codes in APEC Economies, focussing on fire regulations, suggests the
opportunity cost to wood product suppliers and consumers of prescriptive building codes in five
APEC economies, is in the order of US$10.8 billion each year.  Prescriptive fire regulationsoften discriminate against wood products generally and are usually based on social and cultural
expectations rather than scientific data.  For example, fire regulations commonly give
preference to steel over wood in construction, even  though in a fire a steel beam will soften and
bend more rapidly than a wood beam of equivalent standard.  Performance based regulations
overcome this discrimination against wood by specifying fire-ratings for building components[i.e. the material’s reaction under measured fire conditions], rather than simply requiring that
wood not be used in certain parts of a building.  The APEC study notes a shift is already
occurring away from prescriptive standards to scientifically justifiable and measurable
performance-based standards.
Performance-based regulations rather than prescriptive ones are similarly applicable to product
standards, for example bending strength of wood products and durability.
14 Another example might be to agree to strengthen the use of international standards.  The
TBT Agreement already requires Members to base national technical regulations on relevant
international standards where they exist (or are imminent), except where the standards would be
ineffective or inappropriate for fulfilling the legitimate objective of the technical regulation.2  I n
principle the NAMA negotiations might allow consideration of practical ways to foster greater use of
international standards.  This would of course have implications for the work of internationalstandardising bodies, such as the ISO and IEC, and the capacity of all Members, especially
developing and least developed Members, to participate effectively in that work.
15 Harmonisation of national regulations to international standards is often proposed as the best
way forward in this area, though New Zealand and other Members have consistently preferredapproaches based on recognition of the equivalence of technical regulations in individual Members.
One of the impediments to strengthening the use of international standards is that in some sectors,
industry considers the standards take too long to de velop, so that existing international standards are
either far behind current business practice or simply non-existent.  For example the development of
ISO standards in the forest products and building sector has been slow, even though they may be seen
as ultimate replacements for existing national building standards and codes.
                                                     
1 TBT Article 2.8
2 TBT Article 2.4TN/MA/W/4/Add.1
Page 4
16 To supplement work on strengthening the application of existing horizontal disciplines,
therefore, a further approach could be to explore negotiations to address  generic clusters of NTBs ,
typically those associated with a particular sector. The forest products sector again provides an
example of how this approach might deliver the results, which Ministers have sought.  (Please refer to
the example below.)
GENERIC NTBS IN THE FOREST PRODUCTS SECTOR
A 1999 APEC study on non-tariff measures in the forest products sector found that use of
restrictive product standards within national building codes, together with difficult and
expensive conformity assessment for foreign suppliers, distorted trade in building products and
systems.  The sorts of measures which unnecessarily restricted use of wood products included:
• Building codes which prescribe against use of wood (e.g. in relation to height
regulations, by building zones, fire regulations,)
• Prescriptive product standards, e.g. durability and bending strength regulations (e.g.
prescription of some species but not others, requirements for certain grades of timber to
be used, for certain types of glue or other chemical treatments)
• Simply the absence of building codes for wood products in some cases
• Costly compliance procedures
The aim is that building codes should specify the building performance for fire ratings of walls,
floors etc for fire resistance, with Hazard classes for durability, and Strength classes for timber
structural properties.  Product standards then go into the details of how those fire ratings,Hazard classes and Strength classes are achieved with particular species, materials, grades,
chemicals etc.
 Specification of durability performance by reference to a Hazard class is preferred to the
specification of particular species, particular processes and particular chemicals because thereare many combinations of species process and chemical that can give resistance to meet a given
Hazard class.  Also, new chemicals are being developed and
some are becoming outlawed, e.g. - copper-chrome-arsenic preservatives.  Specification of
timber strength by (bending) Strength class is preferred to specification by species and grade.
17 The Negotiating Group might therefore want to consider the feasibility of addressing thesetypes of generic NTBs in single clusters.  For example:
• In relation to technical regulations, and taking forest products as an example, members might
want to consider if a ‘smorgasbord’ approach might be feasible to achieve certain regulatory
objectives.  For example, New Zealand permits imported cars which meet the safety standards
of any of the EU, US, Japan, Australia or the UN-ECE to be placed on the market.  Is a
comparable ‘smorgasbord’ approach feasible for some forest product technical regulations?Could that provide a relatively efficient way for this negotiation to reduce the costs and
distortions, which currently arise from businesses having to meet different technical
regulations in various major global markets?  It is notable that there is a move within ISO
towards declaring specific national, or regional or international standards as equivalent
wherever this is possible rather than setting up one standard as the only option.  For timberTN/MA/W/4/Add.1
Page 5
this sort of approach is especially suited to things like grades, testing methods and strength
classes.
• Other alternatives within the generic clusters approach might also be explored in the course of
negotiations in order to address the costs which business faces due to varied technical
regulations.
18 Another option could be to consider classes of NTBs .  An example could be NTBs that
impose quantitative restrictions on imports, which could be discussed as a group, possibly on an
industry basis.  The following box illustrates this type of NTB as applicable in the fishery sector.
QUANTITATIVE NTBS APPLICABLE IN THE FISH INDUSTRY
The use of quantitative restrictions (QRs) on imports of certain fish and fish products remains
fairly widespread in a number of markets.  Thes e QRs may take the form of absolute limits set
on the import of certain fish products expressed in volume or value terms or both. In other cases
tariff quotas are applied to the import of certain fish and fish products.  In the case of QRs set in
absolute terms, it may be useful to discuss the justifiability of such measures.
19 It is clear that negotiations on NTBs have the potential to become complicated.  New Zealandoffers these observations as a contribution towards further discussion in the NGMA.
__________