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MY LAST article reviewed the International Trade Commission’s (Itac’s) decision to increase the tariff on chicken to a maximum of 82%.
As controversial as their decision may be, it is oftentimes not the financial increases that we should worry about.
The World Trade Organisation (WTO) was born out of negotiations and commenced operations in 1995.
Since 1995, the bulk of the WTO’s work has stemmed from the 1986–94 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT).
Since 1995, the WTO has been committed to fair trade - in other words, to opening up markets by allowing trade to flow as freely as possible. However, with the lowering of tariffs came incremental increases in Non-Tariff Barriers (NTBs).
NTBs are such things as packaging requirements (think of the drive to remove branding from cigarette packaging), labelling requirements (as has been in the news lately regarding meat), content requirements (the sodium content of food) or even such things as limited border post operating hours.
By in large, NTBs were used to replace tariffs.
Consequently, although the tariffs on such things as chicken are visible and hurt the pocket, the NTBs are just as important and in cases, influence prices just as a tariff would.
A simple question thus forms: should we not be as aware of the NTBs as we are of the tariffs?
NTBs can influence prices through limiting supply. Drawing on an understanding of basic economics, if supply is limited, the quantity of (insert good of your choice here) available for consumption is limited as well and this drives the price up because demand is, to this point, unchanged.
Clearly, NTBs can drive up the local purchasing price just like a tariff, the difference being that tariffs directly impact prices and NTBs do so indirectly.
Although the data on NTBs is not as readily available as the data on tariffs, the information is still available if you care to look.
For example, it is possible to find out what the packaging or labelling requirements are and the more prevalent ones are often reported in the news.
But what about the more obscure NTBs, the ones not reported on in the media? Where can one find out about these and where can one find out about changes to NTBs?
As far as I know, there is no singular source for all this information although much of it is available from sources such as the Government Gazettes and a few websites.
That being said, I am certain no one wants to peruse the Government Gazettes and websites daily, so a simpler source is to make use of the Enquiry Point that sits within the SABS.
The Enquiry Point (a free service) can provide subscribers with valuable information from all of the WTO member countries on technical barriers to trade, which make up a large portion of NTBs.
All Government Gazettes are perused and new barriers included in databases that allow for easy retrieval and dissemination.
South Africans love to complain ex post (after the fact) but then it’s too late.
We should work towards being an informed society so that complaints occur ex ante (before the event).
That way, not only can we help prevent harmful regulations but we can sway them in our favour.
- Fin24
*Geoffrey Chapman is a guest columnist and trade policy expert at the SABS. Views expressed are his own.
As controversial as their decision may be, it is oftentimes not the financial increases that we should worry about.
The World Trade Organisation (WTO) was born out of negotiations and commenced operations in 1995.
Since 1995, the bulk of the WTO’s work has stemmed from the 1986–94 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT).
Since 1995, the WTO has been committed to fair trade - in other words, to opening up markets by allowing trade to flow as freely as possible. However, with the lowering of tariffs came incremental increases in Non-Tariff Barriers (NTBs).
NTBs are such things as packaging requirements (think of the drive to remove branding from cigarette packaging), labelling requirements (as has been in the news lately regarding meat), content requirements (the sodium content of food) or even such things as limited border post operating hours.
By in large, NTBs were used to replace tariffs.
Consequently, although the tariffs on such things as chicken are visible and hurt the pocket, the NTBs are just as important and in cases, influence prices just as a tariff would.
A simple question thus forms: should we not be as aware of the NTBs as we are of the tariffs?
NTBs can influence prices through limiting supply. Drawing on an understanding of basic economics, if supply is limited, the quantity of (insert good of your choice here) available for consumption is limited as well and this drives the price up because demand is, to this point, unchanged.
Clearly, NTBs can drive up the local purchasing price just like a tariff, the difference being that tariffs directly impact prices and NTBs do so indirectly.
Although the data on NTBs is not as readily available as the data on tariffs, the information is still available if you care to look.
For example, it is possible to find out what the packaging or labelling requirements are and the more prevalent ones are often reported in the news.
But what about the more obscure NTBs, the ones not reported on in the media? Where can one find out about these and where can one find out about changes to NTBs?
As far as I know, there is no singular source for all this information although much of it is available from sources such as the Government Gazettes and a few websites.
That being said, I am certain no one wants to peruse the Government Gazettes and websites daily, so a simpler source is to make use of the Enquiry Point that sits within the SABS.
The Enquiry Point (a free service) can provide subscribers with valuable information from all of the WTO member countries on technical barriers to trade, which make up a large portion of NTBs.
All Government Gazettes are perused and new barriers included in databases that allow for easy retrieval and dissemination.
South Africans love to complain ex post (after the fact) but then it’s too late.
We should work towards being an informed society so that complaints occur ex ante (before the event).
That way, not only can we help prevent harmful regulations but we can sway them in our favour.
- Fin24
*Geoffrey Chapman is a guest columnist and trade policy expert at the SABS. Views expressed are his own.
