This blog is part of a series about WITS, the World Integrated Trade Solution, a collaborative trade data platform developed by the World Bank and other institutions. This is the sixth installment of the series—for further reading, here are the first, second, third, fourth and fifth installments.
In our fourth installment from this series, we explored the intricacies of tariffs. This time, we turn our attention to another crucial aspect of international trade: Non-Tariff Measures (NTMs). While they might be considered the "new kid on the block," comprehensive collection and analysis of NTMs began twelve years ago, in 2012.
But why should NTMs matter to you? NTMs encompass policy measures beyond tariffs that wield significant economic influence on international trade in goods. Imagine a garlic farmer in Argentina aiming to export to the European Union. To successfully navigate this endeavor, the farmer must adhere to approximately forty-two regulations. These regulations range from labeling requirements for traceability to the necessity of phytosanitary certificates. Similarly, Argentina imposes its own export regulations, further complicating the process. Thus, exporters must be well-versed in regulations both domestically and in target markets, collectively termed Non-Tariff Measures.
While NTMs primarily aim to safeguard health, safety, and the environment, they can also elevate the cost of trading goods. Consequently, exporters and importers alike must navigate a labyrinth of regulations scattered across various official documents. This task is further compounded by outdated measures that remain in effect, making it nearly impossible for traders and governments to identify all pertinent regulations.
For a systematic overview, NTMs need to be categorized. Enhanced data on NTMs serve as a valuable resource for policymakers, traders, and researchers, empowering them to make informed decisions. To provide a structured overview, NTMs are categorized into Import and Export Measures, further divided into Technical (e.g., sanitary measures) and Non-Technical Measures (e.g., licenses).
How are NTM data collected and quantified?
UNCTAD –the United Nations’ trade and development agency– spearheads the collection effort, gathering trade-affecting documents and identifying regulations pertinent to exports and imports. These regulations are then classified into various NTM measures.
Figure 1. Sample NTM data of Azerbaijan for 2018
Figure 2. NTMs measures: How are they distributed?
To analyze NTMs impact, indicators such as frequency and coverage ratios are utilized, offering insights into the prevalence and extent of NTMs affecting traded products. As you can see, NTMs are essential for navigating the complexities of global trade, shedding light on the unseen forces shaping commerce beyond borders.
For further exploration into NTMs, visit UNCTAD’s website, explore disaggregated data and graphs in World Bank’s WITS NTM module, or access data through UNCTAD’s TRAINS portal.
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