Non-tariff measures clogging APEC economic engine: New Zealand report

Non-tariff measures (NTMs) in Asia-Pacific economies are costing the region's exporters 790 billion U.S. dollars a year, said a report from a New Zealand economic think-tank out Monday.

The amount was triple the total costs associated with simple border tariffs, said the report by the New Zealand Institute of Economic Research (NZIER).

The study, commissioned by the Ministry of Foreign Affairs and Trade, focused on the Asia-Pacific Economic Cooperation (APEC) group of economies.

Because APEC economies were looking to develop global value chains, the NTMs had the effect of driving down living standards and limiting business competitiveness, said the report.

Non-tariff measures were policies aside from border tariffs put in place by governments to limit imports or increase their price, NZIER deputy chief executive John Ballingall said in a statement.

"Common examples are quotas, technical standards and animal welfare measures. Some are for legitimate public policy purposes, such as protecting consumers from dangerous products or protecting animal or plant safety," said Ballingall.

"But many are blatantly protectionist in nature -- designed to shield domestic industries from foreign competition," he added.

NTMs were costing New Zealand exporters about 5,9 billion U.S. dollars a year.

"New Zealand's primary sector exporters bear the brunt of APEC economies' NTMs. The dairy sector alone faces NTMs within APEC of 2.7 billion U.S. dollars per year," said Ballingall.

"Our beef and horticultural sectors suffer too, facing additional costs of 770 million U.S. dollars and 310 million U.S. dollars respectively each year."

"There is growing recognition amongst firms, policymakers and researchers that much more needs to be done by governments to address the high costs of NTMs."

The report said APEC was "likely to be the driving force behind further trade liberalization and regional economic integration in coming years."

It made economic sense for policymakers to reduce the accumulated transaction costs as much as possible without compromising legitimate policy objectives.

"The aim should be to remove the grit from APEC's economic engine, allowing it to run more smoothly," it said.

Ballingall said the priority should be on NTMs that were most trade-distorting and inefficient.

"But even the most well-intentioned or legitimate NTMs can be costly. Even a small decrease in the costs of NTMs in the APEC region would improve APEC businesses' competitiveness and lower the costs of doing business. Ultimately this will benefit consumers through cheaper prices for traded goods and services," he said. Endit