PRESS RELEASE 
 
PRESS/667 
16 July 2012 
 
(12-3809) 
WORLD TRADE REPORT 
Increased use of regulatory meas ures creates new challenges for 
the WTO, report says 
Non-tariff measures, such as regulatory standards for manufactured and agricultural goods, can 
have a significant impact on trade - possibly even more than tariffs - according to the latest edition of the WTO's flagship publication published on 16 July 2012. 
 
The World Trade Report 2012  examines why and how governments use non-tariff measures, 
including domestic regulation in services. Such measures can serve legitimate public policy goals, 
such as protecting the health of consumers, but they may also be used for protectionist purposes. 
The Report reveals how the expansion of global pr oduction chains and the growing importance of 
consumer concerns in richer countries affect the use of non-tariff measures. It also reports that 
such measures represent the main source of concerns for exporters. 
 The focus of the Report is on technical barriers to trade (TBT) regarding standards for 
manufactured goods, sanitary and phytosanitary (SPS) measures concerning food safety and 
animal/plant health, and domestic regulation in services.  
"I think it is a good time for th e WTO to have a closer look at non-tariff measures (NTMs)", said 
WTO Director-General Pascal Lamy, at the launch of the Report. "A clear trend has emerged in which NTMs are less about shielding producers from import competition and more about the 
attainment of a broad range of public policy objectives. The new NTMs, typically SPS and TBT 
measures but also domestic regulation in services, address concerns over health, safety, environmental quality and other social imperatives. The challenge is to manage a wider set of 
policy preferences without undermining those preferences or allowing them to become 
competitiveness concerns that unnecessarily frustrate trade."  
While regulatory standards restrict trade in agricultural products, the Report finds, the existence of 
standards often has a positive effect on trade in manufactured products, especially in high-technology sectors. Moreover, the harmonization and mutual recognition of standards is likely to 
increase trade. 
 The Report identifies several challenges for international cooperation, and the WTO more 
specifically. First, the transparency of non-tariff measures needs to be improved. The newly 
created WTO database I-TIP (Integrated Trade Intelligence Portal) will help in improving transparency. Secondly, more effective criteria are needed to identify why a measure is used. 
Thirdly, the increase in global production chains calls for deeper integration and regulatory 
convergence. Lastly, capacity-building is a vital element in improving international cooperation.  PRESS/667 
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Main points 
 
Reasons to use NTMs 
Non-tariff measures, such as TBT/SPS measures, are often the first-best instruments to achieve public policy objectives, including correcting market failures arising from information asymmetries 
or imperfect competition, and pursuing non-economic  objectives, such as the protection of public 
health. While many NTMs are concerned with consumer protection, NTMs can also be utilized by political incumbents to protect domestic producers. 
 
NTMs in the 21
st century 
Economic, social and technological advances have resulted in higher consumer demand for food 
safety and posed new challenges in managing gl obally fragmented supply  chains. Food safety 
measures have proliferated as a tool to respon d to these challenges. As a consequence, various 
approaches to mitigate possible negative trade impacts, such as harmonization of standards, 
equivalence and commitment to a set of rules, are receiving widespread attention. 
 Sources of information on NT Ms and services measures 
Transparency is a major issue with regard to both NTMs and services measures. The relative 
scarcity of information on non-tariff measures is partly due to the nature of these measures, which are inherently more difficult to measure than tariffs. The WTO and other international 
organizations have undertaken substantial efforts and made good progress in classifying and 
collecting data on NTMs in recent years, and th ese efforts are starting to extend to services 
measures. However, more needs to be done to ob tain a clearer and more complete picture of the 
trade policy landscape. 
 Trade effects 
Not all NTMs have a negative impact on trade. Public policy measures such as TBT/SPS measures 
and domestic regulation in services, in particular, do not unambiguously increase or decrease trade. TBT/SPS measures and domestic regulation in services affect not only how much two 
countries trade but also the number of countries with whom they trade. There is also some 
evidence that conformity assessment is particul arly burdensome. Negative effects on trade are 
mitigated by a reduction in policy divergence, whether through convergence to international 
standards, harmonization or mutual recognition. If harmonization and mutual recognition of 
standards occur at the regional level, there may be significant trade-diverting effects on outsiders and regulatory “lock-in”. This appears to be the case especially for developing countries. 
 
Regulation of NTMs in trade agreements Traditional trade agreements contain provisions th at focus on addressing the problem of tariffs 
being replaced by non-tariff measures. The changing nature of international trade and the use of 
private standards may prompt the need for deeper forms of institutional integration. Moreover, the 
growing number of reasons why governments resort to NTMs, including for health, safety and 
environmental considerations, creates a need to develop rules to facilitate co-operation in the 
identification of efficient and legitimate uses of NTMs.  
The SPS and TBT agreements  are “post-discriminatory” agreements. Although they include non-
discrimination obligations, they also contain provisions that go beyond a “shallow integration” approach. They promote harmonization through the use of international standards and include 
obligations that are additional to the non-discrimination obligation. This includes, for instance, the 
need to ensure that requirements are not unnecessarily trade restrictive. Some question the appropriateness of these “post-discriminatory” obligations, arguing that the assessment of a 
measure’s consistency with such requirements is difficult without WTO adjudicators “second-
guessing” a member’s domestic regulatory choices. 
 PRESS/667 
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  Challenges to international co-operation on NTMs . First, the transparency of NTMs must be 
improved and the WTO has a central role to play with its multiple transparency mechanisms. Secondly, more effective criteria are needed to identify why a measure is used. Better integration 
of economic and legal analysis may help achieve this goal. Thirdly, the increase in global production sharing poses additional challenges for the multilateral trading system, calling for deeper integration.   A number of challenges are more specifically related to public policies . Addressing the adverse 
trade effects of TBT/SPS measures and domestic regulation in services requires regulatory convergence. Part of this convergence takes plac e at the regional level and part of it at the 
multilateral level, raising the question of the optimal level. The role of governments and of the WTO with regard to private standards also needs clarification. Negotiations on domestic regulation in services have turned out to be very difficul t to conclude, mainly because of concerns with 
regulatory autonomy. Lastly, capacity building could make a more significant contribution to improving international cooperation on public policies.  Key facts  WTO data on notifications show an increasing use of TBT/SPS measures since the mid-1990s. This increase in the incidence of TBT/SPS measures is reflected in an increase in the number of specific trade concerns raised by WTO members in the TBT and SPS committees. 
 
 
 
Over the last five years, however, only 11 per cent of disputes cited the SPS Agreement and 12 
per cent cited the TBT Agreement.  
Evidence from ITC business surveys suggests that TBT/SPS measures are the most burdensome 
for developing countries' exporters. In 2010, almost half (48 per cent) of the NTMs perceived as burdensome by exporting firms were TBT/SPS me asures. The figure is comparable for the EU. 
 
Ninety-four per cent of specific trade concerns regarding SPS measures, and 29 per cent of those regarding TBT, are related to agriculture. Evidence from WTO disputes also shows a greater PRESS/667 
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number of citations of the SPS and TBT agreements in cases involving agricultural products than in 
other cases. 
 
ITC business surveys show that, for exporters, more than 70 per cent of burdensome NTMs also create a procedural obstacle. 
 
 
 
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