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Technical barriers to trade
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DescriptionThe TBT Agreement is about the right of WTO Members to develop technical requirements, and to ensure that they are complied with. However, the agreement has as its objective ensuring that unnecessary obstacles to international trade are not created. This is achieved through a characterization of a number of legitimate objectives for which mandatory technical requirements may be developed, and through a number of principles which govern the preparation, adoption and application of mandatory and voluntary requirements and conformity assessment procedures, such as: non-discrimination, the avoidance of unnecessary obstacles to international trade, harmonization, mutual recognition of conformity assessment procedures, and transparency.
Technical barriers to trade
1. What is technical barriers to trade
Defining Technical Trade Barriers
There are differing views on what constitutes a technical trade barrier. Earlier literature recognized quarantine policies and an amorphous array of other measures that restricted or delayed entry of products at the border as technical barriers. More recently, agricultural technical barriers have been viewed as a subset of environmental regulations (Hillman). We define technical barriers as regulations and standards governing the sale of products into national markets that have as their prima facie objective the correction of market inefficiencies stemming from externalities associated with the production, distribution, and consumption of these products. These externalities may be regional, national, trans-national, or global. This definition centers the analysis of technical trade barriers on the economic concept of market failure rather than on a mutable list of policy instruments.
Technical trade barriers may be adopted in instances when:
a country's regulators conclude that market mechanisms alone will fail to prevent or correct negative externalities that arise when imported goods may be accompanied by pests or diseases that may reduce domestic output and/or increase production costs;
regulators or industry representatives believe that information about the health, hedonistic, or ethical attributes of agricultural products is either unknown or asymmetrically distributed between producers and consumers, and the transaction costs of obtaining this information are prohibitively high for consumers;
coordination costs and free-rider behavior in an industry prevent development of compatibility standards that could increase firms' potential for realizing economies of scale; or
regulatory authorities judge that markets fail to provide optimal amounts of unowned or commonly owned environmental resources.
Economic Research Service/USDA
We use prima facie in our definition to acknowledge the existence of regulatory capture, when domestic groups with a vested interest in limiting competition successfully lobby for technical measures having questionable legitimacy and that potentially represent a net cost to a country.
In this report, a "standard" is a technical specification or set of specifications related to characteristics of a product or its manufacturing process. From this perspective, standards can be either voluntary or established by government fiat. Several authors have pointed out that voluntary standards can effectively bar imports if they become standard business practice in the importing country, especially if they are accepted as a legal defense against product liability claims (Bredahl and Zaibet; Sykes). However, our primary focus is on command and control measures, the most prevalent type of technical barrier in markets for primary and processed agricultural goods.
This view of technical trade barriers is both broader and narrower than previous perspectives. We exclude incentive measures such as taxes and subsidies, even though these measures may have been established to address externalities. For example, our definition would not include a product packaging ...
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