What's Happening?
The United Nations Conference on Trade and Development (UNCTAD) has identified non-tariff measures (NTMs) as significant barriers to trade for developing countries, surpassing the impact of tariffs. According to UNCTAD's May Global Trade Update, NTMs such
as technical regulations, health and safety requirements, and certification procedures impose higher export costs than tariffs for 88% of countries. These measures, while intended to uphold necessary standards, often result in compliance costs that disproportionately affect developing and least-developed countries. The report highlights that these countries face a 'double burden' due to high duties and complex regulatory requirements, which hinder their market access and export potential.
Why It's Important?
The findings underscore the challenges faced by developing nations in accessing global markets, which can impede their economic growth and development. NTMs can act as hidden trade barriers, increasing costs and reducing competitiveness for exporters from these regions. The report suggests that greater transparency and regulatory cooperation could significantly reduce these costs, potentially lowering NTM-related trade expenses by up to 30%. This could enhance the ability of developing countries to participate in international trade, thereby supporting their economic advancement and integration into the global economy.
What's Next?
UNCTAD recommends improving transparency and regulatory cooperation to alleviate the burden of NTMs on developing countries. This includes expanding and updating global databases of NTMs to provide better access to information. Additionally, fostering regulatory convergence across markets could further reduce costs and facilitate trade. These steps could lead to significant economic benefits for developing nations, enabling them to better compete in the global marketplace.
