Build capacity to deal with non-tariff measures: analysts

South Asian countries should develop the capacity to deal with non-tariff measures as many of them would continue into the future, experts said yesterday.

“But there is no way but to comply with the NTMs. We have to build our capacity, infrastructure and knowledge to face them.”

Ahmed's comments came at a dialogue styled “Promoting trade in Bangladesh-Bhutan-India-Nepal (BBIN) sub-region”.

The Metropolitan Chamber of Commerce and Industry organised the two-day public-private dialogue in association with the Saarc Chamber of Commerce and Industry and the Asia Foundation.

The event, which brought together experts from India, Bhutan, Nepal and Bangladesh, ended yesterday.

Shaquib Quoreshi, secretary of the MCCI, said the popular perception is that tariff levels in Saarc countries have come down to a reasonable level under the South Asia Free Trade Agreement, but the volume of intra-regional trade remains below 5 percent because of the NTMs.

Quoting studies, he said if transaction costs for regional trade are reduced by 25 percent, the welfare gains for all countries will be worth $14.62 billion.

“There is no denying that NTMs manifested as non-tariff barriers and para-tariff barriers are responsible for the high degree of transaction costs in cross-border trade.”

Since the formation of SAFTA in 2006, the sensitive lists among the member states have only gotten bigger, Quoreshi added.

The sensitive list is the list of products of special interest to individual member countries that are exempted from the low Safta tariffs.

The use of sensitive lists allows countries to protect growing domestic industries or important sources of customs revenue.

Ferdaus Ara Begum, chief executive officer of Business Initiative Leading Development, said there is a prevalence of NTMs despite a lot of studies that show that global trade goes up significantly if supply chain barriers are removed.

The sensitive list of each South Asian country should be revised, she added. 

Sonam Tashi, representing the economic affairs ministry of Bhutan, said a line has to be drawn on the issue of NTMs.

Mashiul Alam, deputy chief of Bangladesh Tariff Commission, said the rules of origin are very strict in South Asia. “It is high time that they are downsized.”

MS Siddiqui, a trade analyst of Bangladesh, said trade barriers are the result of political decisions.

He also raised questions why India does not accept the standardisation certification of the Bangladesh Standards and Testing Institution. 

Lakshmanan Savithri, director of Kathmandu-based Saarc Secretariat, called for harmonisation of quality and standards across the region.

Shafquat Haider, a director of the Federation of Bangladesh Chambers of Commerce and Industry, and Syed Humayun Kabir, director general of the South Asian Regional Standards Organisation, also spoke.