Henson et al (2000) report the results of a survey which asked respondents from low and middle income countries to indicate the significance of factors impeding their ability to export agricultural and food goods to the EU. They find that NTMs, specifically “SPS requirements”, “other technical requirements” (for example labeling regulations or compositional standards) and “transport and other direct export costs”, emerged as the top three issues, ahead of tariffs. Cadot and Gourdon (2012) find that SPS measures raise the price of African foodstuffs by 14%, with peaks for certain products, such as rice and other cereals, some types of meat, and edible oils. Combining this information with Kenyan household survey data, they find that NTMs act as a regressive tax, a result arising from the fact that foodstuffs make up a large share of poor households’ budgets and the major impact of NTMs, especially SPS measures, on these goods.

However, NTMs cannot be simply dismissed as trade barriers. Results from gravity type models including Disdier et al (2008), Fontagné et al (2005), Portugal-Perez el al (2010), and Reyes (2011) indicate that while NTMs are generally found to be impediments to trade, they can also be trade promoting. This is because certain NTMs, such as labeling and content requirements, can provide consumers with information thereby lowering transaction costs, facilitating comparison and reducing uncertainty. Thus, NTMs can eliminate a market failure by reducing the cost of determining the quality of a product, thereby helping to prevent a ‘lemon’ problem (Akerlof, 1970). This point is also made by Crivelli and Gröschl (2012), Disidier et al (2008), and Ganslandt and Markusen (2001). Henson et al (2000) report that, to the extent that higher SPS standards increase costs of production, high SPS requirements offer low and middle income countries a source of competitive advantage over developed country suppliers. Chemnitz and Künkel (2006) study the heterogeneous effect of SPS measures across different countries noting that standards can _“act like a catalyst and like a barrier at the same time”_ , and Fontagné et al (2005) find that _“for sensitive products, enforcing a measure at the border may guarantee the existence of trade flows that would otherwise not be recorded at all”_ .

However, research indicates that NTMs can have a particularly negative effect on small and developing countries. Reyes (2012) highlights the interplay between standards harmonization and market structure. Using firm-level data, the author finds that the international harmonization of European standards in the electronic sector increases intra-EU competition to the benefit of exporters from the US but to the disadvantage of exporters from the developing world, who lose market share. Ganslandt and Markusen’s 2001 general equilibrium model finds that incompatible standards are especially harmful for a small country, which can never win a “standards’ war”, where two countries impose cost-increasing standards on imports. In the small country, both producers and consumers may lose. Finally, Disdier et al (2008) find that developing and least developed countries’ exports to the OECD are significantly reduced by SPS or TBT measures. By contrast, these regulations do not have any effect on exports from other OECD states.

# **b. Quantifying NTMs: The MAST Nomenclature**

The NTM nomenclature, developed by the Multi-Agency Support Team (MAST), comprises a tree/branch structure. Measures with similar objectives are categorized into 16 “branches” (chapters) denoted by alphabetical letters A to P. Chapters A to O specify the requirements the importing country imposes on imports, while Chapter P details those regulations they place on their exports. Each of these 16 “branches” is further disaggregated into “sub-branches” (1-digit), “twigs” (2-digits) and “leafs” (3 6