While considering trade restrictions, we mostly think of tariff applied by importing countries. However, another important aspect of trade restriction, that lies beyond tariffs is Non-tariff barriers (NTBs). NTBs are trade restriction tools that include regulations, certifications, custom requirements and other policy requirements to limit imports.

There is massive literature on non-tariff barriers, and what they entail. This post specifically focuses on elaborating the difference between Non-Tariff Measures (NTMs) and Non-Tariff Barriers (NTBs), terms that though sound similar but are significantly different in terms of both intent and impact. Before explaining the difference, let’s quickly review what are NTMs.

What are NTMs?

Non-traiff measures are laws or regulations that help define the standard of the product that is expected by the importing country. These help in attaining objectives such as safeguarding health, environmental protection, complete consumer awareness or national security. The aim of NTMs is to enhance transparency and to ensure that consumers can trust the product that they are consuming.

There are various types of NTMs – classified into 16 broad chapters (A–P). Some of the examples are listed below

• Sanitary and Phytosanitary (SPS) measures: these include guidelines on protecting consumables from risks related to pests, diseases, or contaminants. For instance, pesticide residue limits allowed in food products
• Technical Barriers to Trade (TBT): requirements related to labelling, packaging and quality certifications, which would require the exporter to explicitly disclose the level or concentration of specific substances or components in the product (e.g., lead content in paints or chemicals).
• Rules of Origin: norms that help identify the product’s country of origin. This, in turn, translates into benefits that the exporting country can seek from an FTA or through preferential tariffs.

When do these NTMs translate into Non-Tariff Barriers (NTBs)?

NTMs are legitimate and often necessary. For example, Japan’s quality standards for electrical appliances ensure consumer safety.

However, at times, when NTMs are applied in a discriminatory way or if they become overly complex, they end up being barriers to trade and hence transform into NTBs. Intentionally or unintentionally, they become restrictive for the exporter.  

For example, if a country insists on retesting imported food products from a particular country, that have been tested by the laboratories accredited or recognized by the importing country itself. While the importing country might be claiming that this is a step forward towards consumer safety, this additional layer makes the process opaque and time-consuming, thereby effectively functioning as a Non-Tariff Barrier (NTB).

Some other examples of NTBs include imposing quotas on how much the product can be imported; applying unnecessary administrative fees or creating customs delays;  using ambiguous technical standards which only local goods can meet, thereby blocking imports from other countries.

Why does this distinction matter?

This distinction makes a massive difference as it helps sift legitimate regulations from those that are meant to distort trade. This is important from policy perspective as well as it enables governments to focus discussions and dispute settlements on genuine NTBs, and not NTMs with have been put in place with necessary public-interest in mind.