Technical Barriers to Trade

Category: International Trade Sub-category: International Trade Organisation
Document type: article

Technical Barriers to Trade

The Agreement on Technical Barriers to Trade is also known as the TBT Agreement is an international World Trade Organization treaty.

During the Uruguay Round of the General Agreement on Tariffs and Trade was negotiated. With the establishment of the WTO at the beginning of 1995 it entered into force.

The main purpose of the TBT Agreement is "to ensure that technical negotiations and standards, as well as testing and certification procedures, do not create unnecessary obstacles to trade".

Different nations have different technical regulations and standards. This creates difficulty for producers and exporters. If arbitrarily set,these standards If the standards could be used as an excuse for protectionism. And hence the  standards can become hurdles to trade. However the importance of these standards cannot be denied. They are  necessary for a wide range of reasons  like environmental protection, safety, national security to consumer information. Also these standards may help trade. Therefore there is a need to make a balance  to ensure that standards are genuinely useful, and not arbitrary or an excuse for protectionism. To ensure this balance the  need for TBT Agreement arises.

This agreement does not denies the rights of the countries (members of the WTO) to adopt the standards and regulations that are appropriate enough to meet the requirements for the protection of human , animal or plant life or health, for the protection of the environment or to meet other consumer interests. Also WTO doesn't prohibits its members from taking measures that they feel are important and necessary to ensure that the standards set by them are being met. But that is counterbalanced with disciplines. A huge set of regulations can be very problematic for manufacturers and exporters. Things can be made simpler if the governments apply non discriminative  international  standards, and the agreement encourages them to do so.

The agreement states :

    * The code of good practice for both governments and non-governmental or industry bodies to prepare, adopt and apply voluntary standards. Over 200 standards-setting bodies apply the code.

    * The procedures used to decide whether a product conforms with relevant standards have to be fair and equitable.

    * It discourages any methods that would give domestically produced goods an unfair advantage.

    * The agreement also encourages countries to recognize each other’s procedures for assessing whether a product conforms. Without recognition, products might have to be tested twice, first by the exporting country and then by the importing country.

Manufacturers and exporters need to know  the latest standards  in their prospective markets. To ensure that this information is made available conveniently, all WTO member governments are required to establish national enquiry points and to keep each other informed through the WTO — each year around 900 new or changed regulations are notified.

The Technical Barriers to Trade Committee is the major clearing house for members to share the information and the major forum to discuss concerns about the regulations and their implementation.