Legal Definitions - nontariff measure

Nontariff measure (NTM) refers to any government policy or regulation, other than a direct tax on imports or exports (known as a tariff), that influences the conditions of international trade. These measures can either make it easier or more difficult for goods and services to cross national borders.

Here are some examples illustrating nontariff measures:

• Example 1: Restrictive Health and Safety Standards
  

  Imagine Country A mandates that all imported electronic devices must undergo a specific, unique, and time-consuming safety certification process at its national laboratories, even if these devices have already met international safety standards and passed similar tests in their country of origin. This process adds significant cost and delay for foreign manufacturers.

  This is an NTM because it's a regulatory policy, not a tax, that directly impacts the ability of foreign companies to sell their products in Country A. By imposing unique and burdensome certification requirements, it restricts trade by making it more difficult and expensive for imports to enter the market.

• Example 2: Streamlined Customs Procedures
  

  Consider two neighboring countries, B and C, that sign an agreement to implement a "single window" system for customs clearance. This system allows importers and exporters to submit all required documentation electronically to a single portal, which then distributes it to all relevant government agencies, significantly reducing paperwork and processing times.

  This is an NTM because it's a policy agreement aimed at simplifying administrative procedures, not a tariff. By making customs clearance faster and less complex, it facilitates trade, encouraging more goods to flow between Country B and Country C.

• Example 3: Domestic Subsidies for Agriculture
  

  Suppose Country D provides substantial financial subsidies to its domestic wheat farmers, allowing them to sell their wheat at a lower price than it would otherwise cost to produce. This makes domestically grown wheat significantly cheaper than imported wheat, even without any direct import taxes.

  This is an NTM because it's a government financial policy (subsidies) rather than a tariff. While not directly taxing imports, it indirectly affects international trade by making domestic products more competitive, potentially reducing the demand for imported wheat and thus influencing trade flows.