FUND FOR RESEARCH INTO INDUSTRIAL DEVELOPMENT, GROWTH
& EQUITY
ISO Type 1 Eco-Labels
Global Review of Eco-Labels: Implications for South
Africa
PHASE TWO REPORT
January 2003
Trade Implications for South Africa of Foreign
Eco-Labelling Schemes: A Socio-Economic Assessment
Appendix 4 - Types and Descriptions of Non-Tariff
Measures
This Appendix contains a detailed list of the different possible
types of non-tariff barriers, with a brief description of each
type. This list is sources in total from an unpublished UNCTAD
document titled "Working Definitions for the TCM Coding System".
The list was published in this form in the FRIDGE report titled
"Trade Liberalisation Aspects of the EU-RSA Trade, Development and
Co-operation Agreement (TDCA)". The UNCTAD document differentiates
between the following non-tariff measures:
- Price Control Measures
- Finance Measures
- Automatic Licensing Measures
- Quantity Control Measures
- Monopolistic Measures
- Technical Measures.
Each of the above types of non-tariff measures is presented in
greater detail below:
1. PRICE CONTROL MEASURES
These are measures that are intended to control the prices of
imported articles for the following reasons:
- To sustain domestic prices of certain products when the import
price is inferior to the sustained price;
- To establish the domestic price of certain products because of
price fluctuation in the domestic market or price instability in
the foreign market; and
- To counteract the damage caused by the application of unfair
practices of foreign trade.
Most of these measures affect the cost of imports in a variable
amount calculated on the basis of the existing difference between
two prices of the same product, compared for control purposes. The
measures initially adopted can be administrative fixing of prices
and voluntary restriction of the minimum price level of exports or
investigation of prices, to subsequently arrive at one of the
following adjustment mechanisms: suspension of import licences;
application of variable charges, antidumping measures or
countervailing duties.
Administrative price fixing: By administrative
price fixing, the authorities of the importing country take into
account the domestic prices of the producer or consumer; establish
floor and ceiling price limits; or revert to determined
international market values. Various terms are used, depending on
the country or sector, to denominate the different administrative
price fixing methods, such as official prices, minimum import
prices or basic import prices.
Voluntary export price restraint: A restraint
arrangement in which the exporter agrees to keep the price of his
goods above a certain level.
Variable charges: Variable charges bring the
market prices of imported agricultural and food products close to
those of corresponding domestic products, in advance, for a given
period of time, and for a pre-established price. These prices are
known as reference prices, threshold prices or trigger prices.
Primary commodities may be charged per total weight, while charges
on processed foodstuffs can be levied in proportion to the primary
product contents in the final product. In the case of the European
Union, the charges applied to primary products as such are called
variable levies and those as part of a processed product, variable
components.
Antidumping measures: Antidumping measures may
be taken after an investigation by the investigating authority of
the importing country has led to a determination of dumping and
material injury resulting therefrom. It is considered that dumping
takes place when a product is introduced into the commerce of an
importing country at less than its normal value, i.e. if the export
price of the product exported is less than the comparable price, in
the ordinary course of trade, for the like product when destined
for consumption in the exporting country. Antidumping measures may
take the form of antidumping duties or of price undertakings.
Antidumping investigations: Antidumping
investigations into dumping and injury are conducted by the
investigating authority of the importing country in accordance with
the provisions of Article VI of the GATT Antidumping Code. During
the period of investigations, provisional antidumping measures may
be applied.
Antidumping duties: Duties levied on certain
goods originating from (a) specific trading partners(s) to offset
the dumping margin. Duty rates are generally
enterprise-specific.
Antidumping price undertakings: Undertakings
may be offered by exporters to avoid the imposition of antidumping
duties. They may be accepted by the investigating authority of the
importing country if the exporter is prepared to revise his prices
or ceases to export at dumped prices so that the injurious effect
of the dumping is eliminated.
Countervailing measures: Countervailing
measures may be taken after an investigation by the investigating
authority of the importing country has led to a determination that
the imported goods are benefiting from subsidies, and that they
result in injury. Countervailing measures may take the form of
countervailing duties or undertakings by the exporting firms or by
the authorities of the subsidizing country.
Countervailing investigations: Countervailing
investigations on subsidization and injury are conducted by the
investigating authority of the importing country in accordance with
the provisions of Article VI of GATT and the GATT Subsidies
Code.
Countervailing duties: Duties levied on certain
goods originating from (a) specific trading partner(s) to offset
the amount of subsidization granted on the production or export of
these goods.
Countervailing undertakings: Undertakings may
be offered by exporters or by the authorities of the exporting
country to avoid the imposition of countervailing duties.
Undertakings by the exporters may be accepted by the investigating
authority of the importing country if the exporter is prepared to
revise his prices or renounces the benefit of the subsidies so that
the injurious effect of the subsidies is eliminated. Undertakings
by the authorities of the exporting subsidizing country may be
accepted by the investigating authority if the subsidizing country
is prepared to eliminate or modify its subsidy practices so as to
eliminate their injurious effect, or otherwise act to eliminate
such injurious effect.
2. FINANCE MEASURES
These are measures that regulate the access to and cost of
foreign exchange for imports and define the terms of payment. They
may increase the import cost in a fashion similar to tariff
measures.
Advance payment requirements: Advance payment
of the value of the import transaction and/or related import taxes,
which is required at the moment of the application for, or the
issuance of, the import licence.
Advance import deposits: Obligation to deposit
a percentage of the value of the import transaction for a given
time period in advance of the imports, with no allowance for
interest to be accrued on the deposit.
Cash margin requirement: Obligation to deposit
the total amount corresponding to the transaction value, or a
specified part of it, in a commercial bank, before the opening of a
letter of credit; payment pay be required in foreign currency.
Advance payment of customs duties: Advance
payment of the totality or a part of customs duties, with no
allowance for interest to be accrued.
Refundable deposits for sensitive product
categories: The deposit refunds are charges that are
refunded when the used products or its containers are returned to a
collection system.
Multiple exchange rates: Varying exchange rates
for imports, depending on the product category. Usually, the
official rate is reserved for essential commodities while the other
goods must be paid at commercial rates or occasionally by buying
foreign exchange through auctions.
Restrictive official foreign exchange
allocation: Restrictive allocation of foreign exchange
intended to control import flows, usually executed by the central
bank in the form of permits, visas, authorizations, etc. Sometimes
takes the form of prohibition of foreign exchange allocation.
Regulations concerning terms of payment for
imports: Special regulations regarding the terms of
payment of imports and the obtaining and use of credit (foreign or
domestic) to finance imports.
Transfer delays, queuing: Minimum permitted
delays between the date of delivery of goods and that of final
settlement of the import transaction (usually 90, 180 or 360 days
for consumer goods and industrial inputs and two to five years for
capital goods). Queuing takes place when the prescribed delays
cannot be observed because of foreign exchange shortage, and
transactions are settled successively after a longer waiting
period.
3. AUTOMATIC LICENSING MEASURES
These are measures of a formal character only that do not
involve a restriction.
Automatic licence: Freely-granted approval of
the application for imports. Sometimes also referred to as the open
general or liberal licence.
Import monitoring: Monitoring of the import
trends of specified products, sometimes through inscription in a
register. It may be applied with the purpose of signalling concern
over import surges and to persuade trading partners to reduce
export growth. It may also be applied for environmental purposes.
Sometimes it is a precursor to import restraints.
4. QUANTITY CONTROL MEASURES
These are measures that are intended to restrain the quantity of
imports of any particular good, from all sources or from specified
sources of supply, either through restrictive licensing, fixing of
a predetermined quota or through prohibitions.
Non-automatic licensing: The practice to
require, as a prior condition to importation, an import licence
which is not granted automatically. The licence may either be
issued on a discretionary basis or may depend on specific
criteria.
Licence with no specific ex-ante
criteria: Licence depending on the judgement of the
issuing authority, sometimes also referred to as a discretionary
licence.
Licence for selected purchasers: Licence issued
on certain goods only to specific categories of importers, e.g.
manufacturers, service industry, governmental departments, etc. The
purpose is to limit imports by restraining direct consumption,
while providing the local processing industry with the necessary
inputs.
Licence for specific use: Licence limited to
operations generating anticipated benefits in important domains of
the economy, such as export production, investment projects,
etc.
Licence linked with local production:
Compulsory linkage of imports with local market outputs.
Purchase of local goods: Licence granted under
the condition of the purchase of a share of locally produced goods
which are similar to the imported goods.
Local content requirement: Licence granted
under the condition that a certain product will include a specific
percentage of local inputs.
Barter or counter trade: Swap of goods in
kind.
Licence linked with non-official foreign
exchange: Licence granted if official foreign exchange is
not required. This case includes imports under technical assistance
projects and other sources of external foreign exchange, as well as
imports paid from the importer's own foreign exchange holdings.
Licence combined with or replaced by special import
authorisation: In addition to or instead of a licence
issued by the main licensing body (usually the ministry of trade)
according to the above specified criteria, a special import
authorisation or an inscription in a register is required by a
specialised authority which is co-ordinating a sector of the
domestic economy (ministry of industry, ministry of agriculture,
etc).
Prior authorisation for sensitive product
categories: Prior authorisation subject to registered
inscription, provision of information or other admission procedures
required as a condition for undertaking imports of goods subject to
health and safety regulations, provisions of international treaties
on environmental and wildlife protection, etc.
Quotas: Restriction of imports of specified
products by setting a maximum quantity or value of goods authorised
for import.
Global quotas: Quotas of imports of specific
products set as a total quantity or value. The quotas can be either
unallocated, i.e. goods may be imported from all origins; or
allocated by individual exporting countries. The global quotas may
either be distributed among individual importers on a first-come,
first-served basis or be allocated in advance to determined
importers, often in proportion to their former performance.
Bilateral quotas: Quotas of imports reserved
for a specific country.
Seasonal quotas: Quotas of imports for a given
period of the year, usually set for certain agricultural goods.
Quotas linked with export performance: Quotas
of imports defined as a percentage of the value of exported
goods.
Quotas linked with the purchase of local goods:
Quotas defined as a percentage of the value of locally purchased
goods similar to the imported articles.
Quotas for sensitive product categories: Quotas
determined for reasons of protection of human health, animal health
and life or plant health, the environment, wildlife and to ensure
human safety and to control drug abuse.
Prohibitions: Unconditional interdiction to
import. The so-called "prohibition with exceptions" is incorporated
in the category of licensing which is relevant to the nature of the
exception.
Total prohibition: Prohibition without further
qualifications. This measure may be applied in order to utilise
scarce foreign exchange resources exclusively for imports of
essential goods or to protect domestic industry completely from
foreign competition.
Suspension of issuance of licences: A form of
de facto prohibition, usually applied for
balance-of-payments problems that are expected to be of a
short-term character.
Seasonal prohibition: Prohibition of imports
for a given period of the year, usually applied to certain
agricultural products.
Temporary prohibition: Prohibition with decreed
limited duration.
Import diversification: Prohibition of imports
of certain goods from countries with which the importing country
remains in a significant trade deficit.
Prohibition for sensitive product categories:
Product or country-oriented prohibition for reasons of protecting
human health, animal health and life or plant health, the
environment and wildlife, to control drug abuse or ensure human
safety.
Prohibition for political reasons (embargo):
Prohibition of imports from a country or group of countries,
applied for political reasons.
Export restraint arrangements: By virtue of an
export restraint arrangement between an importer and an exporter,
the latter agrees to limit exports in order to avoid imposition of
mandatory restrictions by the importing country. The arrangement
may be concluded at either government or industry level. These
arrangements are known as voluntary export restraint arrangements
(VERs), orderly marketing arrangements, etc. They are generally
concluded on goods such as iron and steel, machine tools,
automobiles, road transport equipment, electronics, footwear,
textiles and clothing as well as agricultural and food products. In
addition to bilateral arrangements, there is also the Multilateral
Multifibre Arrangement (MFA), officially known as "Arrangement
Regarding International Trade in Textiles or Multifibre
Arrangement", which was negotiated as a temporary exception to
GATT, so as to regulate trade in textile products.
Since its adoption in 1973, the MFA has been reviewed at
intervals. The MFA provides the framework and rules for negotiating
bilateral restraint agreements. An MFA quota agreement establishes
an export quota with a growth rate. Quotas may be administered by
either the importing or exporting country. Under an MFA
consultation agreement, quotas are not set at the moment of
signature but the agreement includes provisions for calls for
consultation with a view to introducing restrictions in certain
circumstances. An MFA administrative co-operation agreement
includes provisions for administrative co-operation with a view to
avoiding disruptions in bilateral trade.
Enterprise-specific restrictions: These
restrictions may replace the quantitative restrictions of a general
character or may be applied parallel to them. They include such
restrictions as selective approval of importers, limitations at the
enterprise level resulting from the national import programme.
Value or quantity quotas for individual enterprises, etc.
5. MONOPOLISTIC MEASURES
These are measures that create a monopolistic situation, by
giving exclusive rights to one or a limited group of economic
operators, for either social, fiscal or economic reasons.
Single channel for imports: All imports or
imports of selected commodities have to be channelled through
state-owned agencies or state-controlled enterprises. Sometimes the
private sector may also be granted exclusive import rights.
Compulsory national services:
Government-sanctioned exclusive rights of national insurance and
shipping companies on all or a specified share of imports.
6. TECHNICAL MEASURES
These are measures that refer to product characteristics such as
quality, safety or dimensions, including the applicable
administrative provisions, terminology, symbols, testing and test
methods, packaging, marking and labelling requirements as they
apply to a product. The technical regulations are subdivided
according to specific purposes.
Technical regulations: Regulations that provide
technical requirements, either directly or by referring to or
incorporating the content of a standard, technical specification or
code of practice, in order to protect human life or health or to
protect animal life or health (sanitary regulation); to protect
plant health (phytosanitary regulation); to protect the environment
and to protect wildlife; to ensure human safety; to ensure national
security; to prevent deceptive practice.
The regulation may be supplemented by technical guidance that
outlines some means of compliance with the requirements of the
regulation, including administrative provisions for customs
clearance, such as prior registration of the importer or obligation
to present a certificate issued by relevant governmental services
in the country of origin of the goods. In certain cases, a prior
recognition of the exporter or certificate issuing service by the
importing country is also required.
Product characteristics requirements: Technical
specifications prescribing technical requirements to be fulfilled
by a product.
Marking requirements: Measures defining the
information for transport and customs, that the packaging of goods
should carry (country of origin, weight, special symbols for
dangerous substances, etc.).
Labelling
requirements:Measures regulating the kind and
size of printing on packages and labelsand defining the information
that may or should be provided to the consumer.
Packaging requirements: Measures regulating the
mode in which goods must be or cannot be packed, in conformity with
the importing country handling equipment or for other reasons, and
defining the packaging materials to be used.
Testing, inspection and quarantine
requirements: Compulsory testing of product samples by a
designated laboratory in the importing country, inspection of goods
by health authorities prior to release from customs or a quarantine
requirement in respect of live animals and plants.
Information requirements: A measure that
obliges detailed information to be provided on the product, such as
enumeration of the contents or advisory notes for use and
disposal.