Beyond Tariff: Protectionism through Non-Tariff Barriers in IORA Countries

Transcription

1 Beyond Tariff: Protectionism through Non-Tariff Barriers in IORA Countries DR KHONDAKER G MOAZZEM ADDITIONAL RESEARCH DIRECTOR CENTRE FOR POLICY DIALOGUE (CPD) BANGLADESH 22 March, 2015

2 Contents 1. Introduction 2. Structure of Trade of IORA countries 3. Non-Tariff Barriers (NTBs) in IORA Countries 4. Addressing NTBs by IORA Countries 5. Possible Institutional Mechanism to Address NTBs

3 1. Introduction IORA countries are at different stages of development Indicate countries structure of production and trade, infrastructure and logistics and quality and standards Trade is increasingly becoming important for IORA countries Trade-openness has been increasing for most of the IORA countries IORA countries are geographically located in different regions across the Indian Ocean South East Asia, South Asia, East Africa, Eastern and Southern Africa, Australia and Gulf region Bilateral trade has been influenced by geographical proximity, preferential trade agreement and other reasons

4 1. Introduction Country Name Per Capita GNI, 2013 Industry VA (% of GDP), 2013 Australia Singapore Seychelles Malaysia Mauritius South Africa Iran, Islamic Rep Thailand Indonesia Sri Lanka India Yemen, Rep Kenya Bangladesh Comoros Tanzania Mozambique Madagascar Oman UAE Source: WDI Economic Development of IORA Countries Trade-Openness of IORA Countries Country Name Australia Bangladesh Comoros India Indonesia Iran, Islamic Rep Kenya Madagascar Malaysia Mauritius Mozambique Oman Seychelles South Africa Singapore Sri Lanka Tanzania Thailand United Arab Emirates Yemen, Rep Source: WDI

5 2. Structure of Trade Global export of IORA countries has increased over the years (3.8 times between ) Intra-IORA export has increased during the same time Share of IORA region did not increase much Global import of IORA countries has increased at a much faster rate (4.3 times between ) Intra-IORA import comprises less share than that of intra-iora export While share in global trade has made considerable progress, share of intra-iora trade did not increase much Regional trade is playing important role for a number of IORA countries Indonesia, Malaysia, Thailand, Singapore Tanzania, Mozambique, Kenya India, Bangladesh As Exporter Export and Import Total global export of IORA countries (bil. US$) Intra-IORA export (bil. US$) Intra-IORA export as % of total global export As Importer Export and Import of IORA Countries Total global import of IORA countries (bil. US$) Intra-IORA import (bil. US$) Intra-IORA import as % of total global import Source: ITC Trademap

6 2. Structure of Trade Exporters Australia Bangladesh India Indonesia Malaysia Mauritus Madagascar Mozambique Oman Singapore South Africa Tanzania Sri Lanka Thailand UAE Intra-regional Export of IORA Countries (Share of Total Export) Yeman Comoros Iran Kenya Seycheles Source: ITC Trademap Intra-regional Import of IORA Countries (Share of Total Import) Importer Australia Bangladesh Comoros India Indonesia Malaysia Mauritus Madagascar Mozambique Oman Singapore South Africa Tanzania Sri Lanka Thailand UAE Yeman Iran Kenya Seycheles Source: ITC Trademap

7 2. Structure of Trade Major trading partners of IORA countries mainly comprises nonregional countries Among the IORA countries, few countries dominate as export destination and import source for most of the IORA countries India, Malaysia, Thailand, Singapore, UAE Exporter Australia Banglades h India Indonesia Malaysia Mauritius Mozambiq ue Oman Singapore South Africa Sri Lanka Thailand Yemen Comoros Iran Kenya Seychelles UAE Tanzania Major importers from IORA India, Singapore, Thailand, Malaysia, Indonesia India, Australia, United Arab Emirates, Singapore, Iran United Arab emirates, Singapore, Bangladesh, South Africa, Indonesia Singapore, India, Malaysia, Thailand, Australia Singapore, Thailand, Indonesia, Australia, India Madagascar, United Arab, Emirates, Singapore, India South Africa, India, Tanzania, united Arab Emirates, Singapore United Arab emirates, India, Tanzania, South Africa, Mozambique Malaysia, Indonesia, Australia, Thailand, India India, Mozambique, United Arab emirates, Singapore, Australia, Kenya India, united Arab emirates, Iran, Australia, Singapore Malaysia, Singapore, Indonesia, Australia, India Thailand, India, United Arab Emirates, Singapore, Malaysia India, Madagascar, Malaysia, Mauritius, Singapore United Arab Emirates, India, Singapore, Indonesia, Malaysia Tanzania, united Arab Emirates, South Africa, Indonesia, Thailand Sri Lanka, Mauritius, Madagascar, South Africa, Singapore India, Iran, Oman, Yemen, Thailand South Africa, India, United Arab Emirates, Mozambique, Singapore

8 2. Structure of Trade Major trading partners of IORA countries mainly comprises nonregional countries Among the IORA countries, few countries dominate as importers and exporters India, Malaysia, Thailand, Singapore, UAE Importer Australia Bangladesh India Indonesia Malaysia Madagascar Mauritius Mozambique Oman Singapore South Africa Sri Lanka Thailand Yemen Comoros Iran Kenya Seychelles UAE Tanzania Major exporters from IORA Singapore, Thailand, Malaysia, Indonesia, UAE Thailand, India, Indonesia, Singapore, Malaysia United Arab emirates, Indonesia, Australia, Iran, Malaysia Singapore, Malaysia, Thailand, Australia, India Singapore, Thailand, Indonesia, Australia, India United Arab Emirates, India, South Africa, Mauritius, Thailand India, South Africa, Australia, Malaysia, Thailand South Africa, United Arab Emirates, Singapore, India, Thailand United Arab Emirates, India, Thailand, Iran, Australia Malaysia, Indonesia, United Arab Emirates, Thailand, India India, Thailand, Singapore, Australia, Mozambique India, Singapore, United Arab Emirates, Oman, Malaysia United Arab Emirates, Malaysia, Singapore, Indonesia, Australia United Arab Emirates, India, Australia, Thailand, Malaysia UAE, South Africa, India, Thailand, Mauritius United Arab Emirates, India, Singapore, Malaysia, Thailand United Arab emirates, India, South Africa, Indonesia, Singapore United Arab Emirates, Singapore, South Africa, Mauritius, Malaysia India, Malaysia, South Africa, Australia, Thailand India, United Arab Emirates, South Africa, Kenya, Singapore

9 2. Structure of Trade Major export products include minerals, agricultural products, manufacturing goods Major import products include fuels, machinery, electrical equipment, processed agricultural products A part of regional trade is taking place under regional value chain Electrical and machinery, agricultural products Regional value chain is operational where favourable tariff structure and trade infrastructure are available. Not all countries are part of those regional value chain Bilateral trade is influenced by geographical proximity, preferential tariff and operation of regional value chain

10 2. Structure of Trade Exporters Australia Bangladesh Comoros India Indonesia Iran Madagascar Malaysia Mauritius Mozambique Oman Singapore South Africa Sri Lanka Thailand Yemen Kenya Seychelles United Arab Emirates Tanzania Top 5 exported products Ores, slag and ash; 2. Mineral fuels, oils; 3. Pearls, precious stones; 4. Meat and edible meat offal; 5. Cereals Articles of apparel, accessories, knit or crochet, 2. Articles of apparel, accessories, not knit or crochet, 3. Other made textile articles, sets, worn clothing etc, 4. Fish, crustaceans, molluscs, aquatic invertebrates nes,5. Vegetable textile fibres nes, paper yarn, woven fabric Coffee, tea, mate and spices, 2. Ships, boats and other floating structures, 3. Essential oils, perfumes, cosmetics, toiletries, 4. Fish, crustaceans, molluscs, aquatic invertebrates nes, 5. Iron and steel Mineral fuels, oils, distillation products, etc, 2. Pearls, precious stones, metals, coins, etc, 3. Vehicles other than railway, tramway, 4. Organic chemicals, 5. Machinery, nuclear reactors, boilers, etc Mineral fuels, oils, distillation products, etc, 2. Animal, vegetable fats and oils, cleavage products, etc, 3. Electrical, electronic equipment, 4. Rubber and articles thereof, 5. Ores, slag and ash Mineral fuels, oils, distillation products, etc, 2. Plastics and articles thereof, 3. Organic chemicals, 4. Ores, slag and ash, 5. Edible fruit, nuts, peel of citrus fruit, melons Nickel and articles thereof, 2. Coffee, tea, mate and spices,3. Articles of apparel, accessories, not knit or crochet, 4. Articles of apparel, accessories, knit or crochet,5. Fish, crustaceans, molluscs, aquatic invertebrates nes Electrical, electronic equipment, 2. Mineral fuels, oils, distillation products, etc, 3. Machinery, nuclear reactors, boilers, etc, 4. Animal, vegetable fats and oils, cleavage products, etc, 5. Plastics and articles thereof Articles of apparel, accessories, knit or crochet, 2. Meat, fish and seafood food preparations nes, 3. Articles of apparel, accessories, not knit or crochet, 4. Sugars and sugar confectionery, 5. Sugars and sugar confectionery Mineral fuels, oils, distillation products, etc, 2. Aluminium and articles thereof, 3. Miscellaneous chemical products, 4. Tobacco and manufactured tobacco substitutes, 5. Ores, slag and ash Mineral fuels, oils, distillation products, etc, 2. Mineral fuels, oils, distillation products, etc, 3. Ores, slag and ash, 4. Organic chemicals, 5. Fertilizers Electrical, electronic equipment, 2. Mineral fuels, oils, distillation products, etc, 3. Machinery, nuclear reactors, boilers, etc, 4. Commodities not elsewhere specified, 5. Organic chemicals Pearls, precious stones, metals, coins, etc, 2. Ores, slag and ash, 3. Mineral fuels, oils, distillation products, etc, 4. Vehicles other than railway, tramway, 5. Iron and steel Articles of apparel, accessories, knit or crochet, 2. Articles of apparel, accessories, not knit or crochet, 3. Coffee, tea, mate and spices, 4. Rubber and articles thereof, 5. Pearls, precious stones, metals, coins, etc Machinery, nuclear reactors, boilers, etc, 2. Electrical, electronic equipment, 3. Vehicles other than railway, tramway, 4. Rubber and articles thereof, 5. Plastics and articles thereof Mineral fuels, oils, distillation products, etc, 2. Fish, crustaceans, molluscs, aquatic invertebrates nes, 3. Iron and steel, 4. Edible fruit, nuts, peel of citrus fruit, melons, 5. Dairy products, eggs, honey, edible animal product nes Coffee, tea, mate and spices, 2. Mineral fuels, oils, distillation products, etc,3. Live trees, plants, bulbs, roots, cut flowers etc, 4. Edible vegetables and certain roots and tubers, 5. Articles of apparel, accessories, knit or crochet Meat, fish and seafood food preparations nes, 2. Fish, crustaceans, molluscs, aquatic invertebrates nes, 3. Salt, sulphur, earth, stone, plaster, lime and cement, 4. Optical, photo, technical, medical, etc apparatus, 5. Machinery, nuclear reactors, boilers, etc Mineral fuels, oils, distillation products, etc, 2. Pearls, precious stones, metals, coins, etc, 3. Aluminium and articles thereof, 4. Plastics and articles thereof, 5. Machinery, nuclear reactors, boilers, etc Pearls, precious stones, metals, coins, etc, 2. Ores, slag and ash, 3. Coffee, tea, mate and spices, 4. Edible fruit, nuts, peel of citrus fruit, melons, 5. Oil seed, oleagic fruits, grain, seed, fruit, etc, nes

11 2. Structure of Trade Importers Australia Bangladesh Comoros India Indonesia Iran Madagascar Malaysia Mauritius Mozambique Oman Singapore South Africa Sri Lanka Thailand Yemen Kenya Seychelles UAE Tanzania Top 5 imported products Mineral fuels, oils, distillation products, etc, 2. Machinery, nuclear reactors, boilers, etc, 3. Vehicles other than railway, tramway, 4. Electrical, electronic equipment, 5. Pharmaceutical products Cotton, 2. Machinery, nuclear reactors, boilers, etc, 3. Mineral fuels, oils, distillation products, etc, 4. Electrical, electronic equipment, 5. Iron and steel Meat and edible meat offal, 2. Cereals, 3. Machinery, nuclear reactors, boilers, etc, 4. Electrical, electronic equipment, 5. Salt, sulphur, earth, stone, plaster, lime and cement Mineral fuels, oils, distillation products, etc, 2. Pearls, precious stones, metals, coins, etc, 3. Machinery, nuclear reactors, boilers, etc, 4. Electrical, electronic equipment, 5. Organic chemicals Mineral fuels, oils, distillation products, etc, 2. Machinery, nuclear reactors, boilers, etc, 3. Electrical, electronic equipment, 4. Iron and steel, 5. Vehicles other than railway, tramway Machinery, nuclear reactors, boilers, etc, 2. Cereals, 3. Electrical, electronic equipment, 4. Cocoa and cocoa preparations, 5. Iron and steel Mineral fuels, oils, distillation products, etc, 2. Machinery, nuclear reactors, boilers, etc, 3. Vehicles other than railway, tramway, 4. Cereals, 5. Electrical, electronic equipment Electrical, electronic equipment, 2. Mineral fuels, oils, distillation products, etc, 3. Machinery, nuclear reactors, boilers, etc, 4. Plastics and articles thereof, 5. Vehicles other than railway, tramway Mineral fuels, oils, distillation products, etc, 2. Machinery, nuclear reactors, boilers, etc, 3. Fish, crustaceans, molluscs, aquatic invertebrates nes, 4. Electrical, electronic equipment, 5. Vehicles other than railway, tramway Mineral fuels, oils, distillation products, etc, 2. Machinery, nuclear reactors, boilers, etc, 3. Vehicles other than railway, tramway, 4. Electrical, electronic equipment, 5. Aluminium and articles thereof Mineral fuels, oils, distillation products, etc, 2. Vehicles other than railway, tramway, 3. Machinery, nuclear reactors, boilers, etc, 4. Electrical, electronic equipment, 5. Articles of iron or steel Mineral fuels, oils, distillation products, etc, 2. Electrical, electronic equipment, 3. Machinery, nuclear reactors, boilers, etc, 4. Optical, photo, technical, medical, etc apparatus, 5. Pearls, precious stones, metals, coins, etc Mineral fuels, oils, distillation products, etc, 2. Machinery, nuclear reactors, boilers, etc, 3. Electrical, electronic equipment, 4. Vehicles other than railway, tramway, 5. Commodities not elsewhere specified Mineral fuels, oils, distillation products, etc, 2. Machinery, nuclear reactors, boilers, etc, 3. Vehicles other than railway, tramway, 4. Electrical, electronic equipment, 5. Knitted or crocheted fabric Mineral fuels, oils, distillation products, etc, 2. Electrical, electronic equipment, 3. Machinery, nuclear reactors, boilers, etc, 4. Iron and steel, 5. Pearls, precious stones, metals, coins, etc Mineral fuels, oils, distillation products, etc, 2. Cereals, 3. Vehicles other than railway, tramway, 4. Machinery, nuclear reactors, boilers, etc, 5. Iron and steel Mineral fuels, oils, distillation products, etc, 2. Machinery, nuclear reactors, boilers, etc, 3. Vehicles other than railway, tramway, 4. Electrical, electronic equipment, 5. Iron and steel Fish, crustaceans, molluscs, aquatic invertebrates nes, 2. Machinery, nuclear reactors, boilers, etc, 3. Ships, boats and other floating structures, 4. Electrical, electronic equipment, 5. ircraft, spacecraft, and parts thereof Pearls, precious stones, metals, coins, etc, 2. Machinery, nuclear reactors, boilers, etc, 3. Electrical, electronic equipment, 4. Vehicles other than railway, tramway, 5. Mineral fuels, oils, distillation products, etc Mineral fuels, oils, distillation products, etc, 2. Vehicles other than railway, tramway, 3. Machinery, nuclear reactors, boilers, etc, 4. Electrical, electronic equipment, 5. Iron and steel

12 3. Non-Tariff Barriers Non-tariff barriers are major concerns for most of the IORA countries IORA countries belong to South Asia are found to apply para-tariff, port restrictions, pre-shipment inspections, SPS and TBT restrictions and quality standards. Affect trade of different kinds of agricultural products, processed foods, raw materials and manufactured goods Countries in South East Asia practice import customs surcharge, technical measures, product characteristic requirement, licensing requirement, quality control, technical regulation on quality and labelling, standard requirement, inspection requirement and tariff rate quota. Affect trade of different kinds of minerals, electrical appliances and machinery

13 3. Non-Tariff Barriers NTBs used by South Asian Countries Afghanistan Bangladesh India 1. Para-Tariffs 2. Port Restrictions 3. Pre-Shipment Inspection Requirement 4. SPS Restrictions 5. TBT Restrictions 6. Fluctuating Standards and Procedural Steps 1. Port Access Limitations 2. Licensing and Registration Requirements 3. SPS and TBT Restrictions 4. Para-Tariffs 5. Miscellaneous Payment Requirement 1. Port Restrictions 2. SPS Restrictions 3. TBT Restrictions 4. Fluctuating Standards and Procedural Steps Sri Lanka 1. Para-Tariffs 2. Licensing Requirements 3. SPS Restrictions 4. TBT Restrictions 5. Quality Standards 6. Quantitative Restrictions for Exports

14 3. Non-Tariff Barriers Non-Tariff Barriers in South East Asian Countries Non-tariff Barrier Number of Tariff Line Affected Customs surcharges 2,683 Additional Charges 126 Single Channel for Imports 65 State-trading Administration 10 Technical Measures 568 Product Characteristic 407 Requirement Marketing Requirements 3 Technical Regulations 3 Source: ASEAN Secretariat website

15 3. Non-Tariff Barriers Countries in East Africa practice import restriction, procedural delay, non-recognition of SPS certificates and differentiated port procedures. Procedural complexities/weaknesses affect trade Countries in the Gulf region practice anti-dumping measures and delay in providing clearances. Countries in different regions are confronting with different kinds of NTBs in case of trading with major partners.

16 3. Non-Tariff Barriers NTBs Used by East African Countries NTB Summary Description 1. Non-implementation of EAC harmonized documents. 2. Lack of harmonized procedures manual 3. Delays in transit bonds cancellation 4. Numerous institutions involved in testing goods 5. Existence od several weighbridge station in the central and North ear corridors 6. Uganda ban on beef & beef products from Kenya 7. Several policy roadblocks along Northern and Central corridors, estimated at 36 between Mombasa-kigali and 30 between Dar EsSalaam to Rusumo border 8. Lengthy procedures for issuing of work permits vary among EAC partner States 9. Charges a plant import permit(pip) at Malaba on Ugandan tea destined for auction at Mombasa 10. Non recognition by Kenya for SPS certificates issued by Uganda for tea destined for Mombasa action. 11. Lack of interface within the customs systems in the Revenue Authorities in Partner States. 12. Lack of harmonized port procedures manual. 13. Border management institutions working hours are not harmonized. 14. Inadequate Police Escort mechanism. 15. Inadequate quality of infrastructural services. 16. Corruption along the Northern and Central Corridors (police roadblocks, weighbridge and border gates). 17. Lack of Verification sheds and parking yards at border posts 18. Charges by Container Freight Stations vary from port charges 19. Exports of plastic products from Kenya are subjected to 10% and 25% CET rate. 20. Visa charges of US$ 250 for businessmen. 21. No movements of Cargo Trucks beyond 6:00 pm within Tanzania 22. RA has introduced check points in the Central Corridor with timeframes and imposed charges for the delays to reach the destinations 23. Kenya Import levy of Kshs 2 per Kg on Agricultural Products from Tanzania

17 3. Non-Tariff Barriers NTBs Used by East African Countries NTB summary Description 1. Requirement for OTS (Open Tender System) for bulk Fuel Procurement System 2. Reduction of grace period for transit cargo at Dar es Salaam Port from 30 to 14 days 3. Congestion in the Ports 4. Non-harmonized road user charges / road tolls 5. Weighing of empty trucks in Tanzania 6. Delays in issuing bonds at Kenya border with Uganda for tea meant for auction in Mombasa 7. Delays at Malaba border for trucks driving to Uganda 8. Kenya has introduced Cash Bond on used clothes and shoes / other items considered of high value 9. Kenya has introduced Customs warehouse rent that starts after the release of cargo manifest 10. Requirement by KRA for transporters to have introductory letters from URA on certain products / consignments, e.g. tyres and spirits 11. Cut-flower from Tanzania for reexports to Europe and Russia blocked by Kenya 12. Lack of recognition of CTH criteria in the EAC ROO for motor vehicles 13. Kenyan Trucks entering into Tanzania are charged a levy of US$ 200 each 14. Lack of availability of simplified certificate of origin issued by Tanzania 15. Cigarettes manufactured in Kenya exported to Tanzania required to have a local 75% tobacco content 16. Kenya tourist vans are not allowed to enter Tanzania. They are required to off load tourists to Tanzania registered vans.

18 4. Addressing NTBs Most IORA countries discussed about NTBs both at bilateral and regional levels. Since measures that act as NTBs tend to vary greatly in their nature, NTB-elimination will mean a different thing depending on the measure concerned. Technical regulations cannot be done away with because there are valid reasons for maintaining them The elimination of these measures as NTBs might mean harmonizing product standards or developing mutual recognition of standards across Member Countries. The idea is to limit the trade-hampering effects of technical regulations or measures

19 4. Addressing NTBs IORA countries being member of different RTAs have been undertaken different measures on NTBs ASEAN member countries are now in the process of verifying the list of NTBs and products covered by these measures compiled by the ASEAN Secretariat. Several criteria have already been considered by the Interim Technical Working Group on CEPT for AFTA (ITWG) to identify which products/measures have to be dealt with first. These criteria are (a) number of private sector complaints, (b) difference between domestic and world prices, and (c) trade value. These criteria can be used singly or in combination with each other to set priorities.

20 4. Addressing NTBs Other ASEAN-wide Activities bearing on NTBs ASEAN Consultative Committee for Standards and Quality (ACCSQ) has already set up a Task Force to deal with NTB elimination. It can convene the expert panels or expert groups that will be involved in assessing how far ASEAN can go in harmonising technical standards or developing mutual recognition agreements. There is also some work along these lines currently being done on Sanitary and Phytosanitary (SPS) measures for agricultural products. Under the Senior Officials of the ASEAN Ministers of Agriculture and Forestry (SOM AMAF) the Working Group on SPS measures have come up with action plans on NTB elimination in the areas of crops, livestock and fisheries. The action plans involve compiling information on technical measures in ASEAN countries covering agricultural products Looking into how greater transparency, mutual recognition and harmonisation of SPS standards can further liberalise intra-asean trade in agricultural products.

21 4. Addressing NTBs EAC has undertaken a time-bound initiative to eliminate NTBs Identified countries and agencies responsible for NTBs Possible impact on businesses Necessary action to be taken; major bottlenecks for success Timeframe for implementation EAC countries have initiated study to implement legally binding enforcement mechanism on elimination of identified NTBs. South Asian countries have discussed about NTBs Initiated a process to identify NTBs Still it is at early stage Gulf countries have discussed about the importance of elimination of NTBs

22 4. Addressing NTBs All regional initiatives did not make same level of progress. Because of MFN nature, eliminating NTBs at regional level is supposed to benefit both member and non-member countries. In contrast, IORA countries which are not part of any of those regional initiatives need to take under new initiative to address NTBs

23 5. Possible Institutional Mechanism under IORA to Address NTBs Focus of lora is on trade facilitation through trade policy coordination, harmonization and simplification of procedures and dissemination of information through appropriate arrangements. IORA as per its mandate should identify an effective mechanism to address NTBs applied by member countries. An institutional arrangement could be considered to undertake initiatives to address NTBs. Working group on trade and investment need to specifically put responsibility for NTBs

24 5. Possible Institutional Mechanism under IORA to Address NTBs A committee could be set up which will acknowledge different regional initiatives on NTBs, thereby harmonise its activities and will identify new activities. Taking support from business community, the committee could create a database on NTBs which could be used for discussion in appropriate fora for taking decision on their elimination.

25 Thank You.