India proposes NTB resolution mechanism

New Delhi, May 17 | Updated: May 18 2006, 05:30am hrs
Anticipating a spurt in non-tariff barriers from developed countries once tariffs are brought down further under the World Trade Organisation (WTO) regime, India and ten other developing countries have proposed the establishment of an NTB-resolution mechanism in the WTO. The proposed mechanism would supplement the presently available means to resolve NTBs at the WTO.

NTBs refer to any measure other than a tariff, which act as a barrier on trade. This includes internal measures that may discriminate or unnecessarily restrict access to markets like stringent quality norms.

In a submission to the WTO, the group of eleven developing countries (Nama-11) which includes India, Brazil, Argentina, Egypt, Philippines, South Africa and Venezuela pointed out that the existing system for resolving NTBs through dispute settlement mechanism was inappropriate, costly and time-consuming.

The group stressed that there was a need for a new, standing, flexible and expedient mechanism that is solution-based rather than rights- based and that would offer creative and pragmatic results, which further trade, rather than adversarial outcomes which hinder trade.

According to the proposal, the NTB resolution mechanism would be guided by the principle of good faith and conciliatory negotiations where every member would make an effort to resolve the NTB at hand, under the guidance of a mutually agreed expert facilitator.

Cutting The Red Tape

What is NTB
NTBs refer to any measure other than a tariff, which act as a barrier on trade
What is the need
The existing system for resolving NTBs through dispute settlement mechanism is inappropriate
What would be the body like
An expedient mechanism that is solution-based rather than rights- based
Issues to be resolved on a case-by-case basis; outcome can be sought within 60 working days of the appointment of the facilitator

Members would be required to engage with the intention of arriving at a solution to the NTB. It would be informal, low-key and less adversarial than the dispute settlement undertaking (DSU). The fundamental premise for the mechanism is that there are many NTBs and related issues that can be resolved by trade experts on a case-by-case basis, without going into the legality of the measure.

Such a mechanism will consider primarily the adverse trade impact of such NTB, and not necessarily its legality, and attempt to resolve it on a mediatory or facilitative platform.

The NTB resolution mechanism would have clear and short deadlines. An outcome should be sought within no longer than 60 working days of the appointment of the facilitator. The procedure would be flexible and the facilitator will be free to choose the preferred method. Flexibility would also apply to the solutions sought.

While participating in the procedure will be mandatory, implementation of the recommended solution will not be so. This is important as a mandatory implementation requirement will affect the legal rights of the members concerned. Instead, any party unwilling to implement the recommended solution will be required to state its reasons in the relevant WTO body/committee, to which the original request for launching of the NTB resolutions mechanism was made.

Members will retain their right to approach the dispute settlement board.