Non tariff measures serve as legitimate public policy objectives. Using non-tariff measures in the global market is witnessing an increasing trend. The current year's World Trade Report published by the WTO focuses more on non-tariff measures. The WTO Trade Report 2012 clearly indicates the importance in increasing transparency in using non-tariff barriers, and measures.
Due to NTMs, an average loss of 30 billion USD incur in the global trade. The 2012 WTO report confirms the negative impact of NTMs, stating NTMs are less in shielding producers from import competition, and more of attaining public policy objectives. The report further reveals that expansion of global production chain and growing consumer concerns in developed countries affect adopting non-tariff measures, which is an issue for exporters.
India's trade benefits:
A rough estimation states that $3 billion worth of informal trade happens between countries normally. This can be brought to mainstream by brining better trade measures. Informal exports from India to Pakistan mainly include textiles, garment, jewellery and spices which are being transported through Singapore and Dubai. The tariff liberalization is likely to boost trade activities between India and Pakistan, as the latter is currently importing many products at high prices from many other countries.
Indian Textile Industry Impact:
India's share of global trade is 4%. Indian textile industry attracts 20% of non-tariff barriers (NTBs), and non tariff measures (NTMs). Cotton and clothing items have attracted much of the NTBs. Textile and apparel exporters in India are complying with various barriers such as anti dumping actions, labeling, custom duties, Government regulations, environmental norms, and certifications. India faces around 60 NTBs, and NTMs on textile and clothing items of which approximately 65% are from countries such as Argentina, Mexico, Brazil, Chile, and Columbia.
Studies conducted by the Textiles Committee on the effect of NTBs on Indian trade reveals that cotton, and cotton products from India are very negligible due to various trade barriers imposed on the country. The 2012 World Trade Report probes into why Government's use non-tariff measures such as domestic regulations.
Buyers today are increasingly focusing on measures that are trade restrictive, but not NTMs. EU has come up with many regulations such as packing, waste management, REACH etc. They are further concerned about a number of social and environmental standards. Many brands have set goals to reach zero discharge by 2015, and are working with their supply chain processes. Despite considered being too ambitious, and feared of escalating operating costs, companies are more concerned on improving the green foot print.