standards and MArket access

INTRODUCTION

Standards and Market Access: What, Why and How?

Let’s begin with the hypothesis: are standards resulting in barriers to market access? The World Trade Organisation (WTO) came into existence in 1995 after the culmination of the Uruguay Round of multilateral trade negotiations under the General Agreement on Tariffs and Trade (GATT) framework. The Uruguay Round led to a considerable reduction in tariffs applied on goods. Theoretically tariff reductions are expected to affect the export potential of a country in a positive manner, i.e. through increased market access. However, border tariff is one among many factors influencing market access.

The original GATT treaty (GATT 1947) covered a wide range of trade-related domestic policies. But, at the same time, governments were left with considerable discretion in the administration of such policies. Such discretionary power led to the adoption of biased trade measures on the part of governments. This resulted in contraction of market access opportunities.

In order to avoid inappropriate application of such policies GATT 1994 found it necessary to clarify that governments while administering their domestic measures (applicable to imports) extend these rules to trade measures not originally (or inadequately) covered by GATT 1947. Thus, the Uruguay Round of multilateral trade negotiations reached various agreements concerning rules governing world trade. Two of them are concerning standards: sanitary and phyto-sanitary measures (SPS), and technical barriers to trade (TBT).

However, in the initial years of functioning of the world trading system under the auspices of the WTO it has been observed that many countries are trying to set standards which may act as non-tariff barriers, especially to exports originating from developing and least developed countries. Moreover, these barriers are taking new forms, thus making developing and least developed countries more exposed to volatility with respect to sustainable market access in industrialised countries. A number (as well as nature) of trade disputes concerning SPS and TBT agreements highlights that: 

·        the WTO members are interested to use these rules to reduce market access opportunities of their trading partners; and   

·        in order to do so they are trying to obtain legal jurisprudence on a variety of cases.

The question is whether standards are used for legitimate concerns or for erecting trade barriers or not. There may not be ‘an’ answer and a set of issues needs to be considered to find a roadmap. Otherwise, roadblocks could lead to accentuation of poverty as revealed by the ground realities in developing and least developed countries.

For example, Tanzania is well endowed with water resources, the fishing sector is contributing three percent to its gross domestic product, and the sector has a lot of social significance as well: one of the main sources of employment. During the past three years, the country has witnessed two bans of its fish from Lake Victoria into the EU (European Union) market. The effect of the last ban was a daily loss of export revenue of Tshs 80mn and about 4,000 people (apart from small-scale fishermen who could not find a market for their catch) were suspended from work. Tanzania lacks behind in complying with the SPS Agreement because of insufficient technical know-how, competent human resources, and financial resources and facilities. 

Not only there is lack of understanding on the part of various stakeholders, concerted efforts are not being made to engage in discussions. What is required is dialogue to address the issues in an unbiased manner and try to find solutions for sustainable market access by evolving a roadmap through consensus rather than creating roadblocks.

What

·        Create and build sustainable capacity of stakeholders, i.e. policy makers, trade diplomats, representatives of business, farmers organisations, non-governmental organisations, university/college teachers, research institutes, and media to address issues of and complex linkages between standards and market access, and their implications for poverty eradication.

·        Analysing policies and praxis of governments and regional bodies on standards so as to enhance their responsiveness and accountability to the people while adopting measures for ensuring better quality products in the market as well as facilitation of trade and commerce.

·        Providing upward and downward linkages with the grassroots to convey their views and concerns to policy makers, trade diplomats etc, and vice versa.

Why

·        To impart analysing skills on standards, their impact on market access and implications for poverty reduction to stakeholders, which are unfolding and evolving.

·        To create an informed society through exchange of information and knowledge thus enhancing transparency and accountability through effective participation of developing countries in the standard setting process by international standard setting organisations.

·        To promote cooperation between and among standard setting entities and countries for ensuring appropriate transfer of technology and other resources from industrialised countries to upgrade facilities in developing and least developed countries.

How

·        By generating case studies on how standards are affecting market access and their implications on poverty in developing and least developed countries and turning them into reader-friendly materials.

·        By analysing trade disputes vis-à-vis SPS and TBT agreements and the implications of jurisprudence on market access opportunities of developing and least developed countries.

·        By facilitating sharing of experiences and learnings between stakeholders through organising dialogues (for sensitising policy makers, trade diplomats, media etc) and workshops (for generating analytical skills) in different places.

·        By finding way forwards for developing and least developed countries to cope with the standards, which would include

¨      Identification of bottlenecks,

¨      How to comply with them, i.e. capacity building,

¨      How to get the best and appropriate technology, including testing protocols/equipment, and

¨      How to negotiate best price for such goods.

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