“New Protectionism” in ASEAN

ABSTRACT

The 21st century suggests a somewhat vexing scenario of “new protectionism”, especially with the rise of protectionist non-tariff measures or NTMs. This largely refers to standard-like NTMs (sanitary and phytosanitary measures and technical barriers to trade, known as SPS and TBTs respectively) with a dual purpose of non-trade policy objectives and (hidden/concealed) protectionism. Since ASEAN is a high user of standard-like NTMs relative to other measures, this begs the question if there is an intentional shift toward murky protectionism in the region. Grounded on a few criterion to establish potential protectionism, the paper forwards the plausibility of “hidden” barriers in the standard-like NTMs drawing upon related secondary data, and specific illustrative cases of harmful and burdensome NTMs in the individual ASEAN countries. From the narrative experiences of ASEAN, it is inferred that procedural obstacles, directly associated with a reported standard-like NTMs, instead of the NTM itself, account for the “hidden” barriers in ASEAN. The paper concludes that irrespective of the motivation for protectionist NTMs, whether unintentional or intentional, procedural obstacles deserve attention in their own right. Regulatory reform for the standard-like NTMs is therefore needed at the national-level of the AMS to get rid of those “hidden” barriers.

KEYWORDS:

• Standard-like non-tariff measures
• sanitary and phytosanitary measures
• technical barriers to trade
• protectionism
• procedural obstacles
• ASEAN

Disclosure statement

No potential conflict of interest was reported by the author.

Online databases

Economic Research Institute for ASEAN and East Asia – United Nations Conference on Trade and Development (ERIA-UNCTAD). Retrieved from http://asean.i-tip.org/?platform=hootsuite

Global Trade Alert (GTA). Retrieved from: https://www.globaltradealert.org/data_extraction

Sanitary and Phytosanitary Information Management System (SPS-IMS). Retrieved from http://spsims.wto.org/en/Notifications/Search

Technical Barriers to Trade Information Management System (TBT-IMS). Retrieved from http://tbtims.wto.org/en/Notifications/Search

World Development Indicators (WDI) databank. Retrieved from http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators

World Integrated Trade Solution (WITS). Retrieved from https://wits.worldbank.org/datadownload.aspx?lang=en

Notes

1. NTBs, a subset of NTMs, are used for nefarious purposes – to protect domestic producers from foreign competition – in the same way as tariffs.

2. NTMs are regulatory tools, other than standard border tariffs, that can have potential economic effects on trade – either a decrease in quantities traded, an increase in their price, or some combination of both.

3. SPS measures correspond to the standards and procedures to protect human, animal and plant health from diseases, pests, toxins and other contaminants. TBT features the technical regulations, product standards, environmental regulations, labeling and other related measures that have bearings on human health and animal welfare.

4. The focus of this paper is on SPS and TBTs as they are considered among the most relevant impediments to trade, according to business surveys (WTO, 2012).

5. The term “standard-like” is used to describe SPS and TBTs as they often take the form of standards to be met by imports as well as their domestic counterparts (UNCTAD, 2018).

6. Worth noting here is that divergence can be incidental or path divergent; not grounded in any strong preference but rather in habit or custom (WTO, 2012).

7. The Codex Alimentarius is significantly relevant for international food trade, as the food standard (both product and process) issues cover specific raw and processed materials characteristics, food hygiene, pesticides, residues, contaminants and labeling and sampling methods.

8. The ERIA-UNCTAD database is relatively recent (launched in April 2016), and is the most comprehensive database on NTMs in ASEAN.

9. UNCTAD (2012) developed the international classification of NTMs. The classification of NTMs consists of 16 chapters (Chapters A to P; see Table A1), and each individual chapter is divided into groupings with depth up to three levels.

10. The export classification of NTMs has been expanded (still at an interim stage) by UNCTAD and the ERIA-UNCTAD database for ASEAN is currently being updated based on the latest classification.

11. Technical measures refer to SPS, TBT and pre-shipment inspection, Chapters A, B and C of Table A1.

12. Policy notifications by governments are reporting requirements to the WTO to ensure transparency and information dissemination to all trade partners and to give governments an opportunity to ask for clarification or changes in polices not conforming to WTO rules.

13. In want of space, the types of SPS and TBT measures for the individual AMS are not reported.

14. Reciprocity in the streamlining of NTMs does not make sense (WTO, 2012). There is little bargaining space for NTMs, that is, NTMs cannot be reduced or negotiated down like tariffs.

15. Through focused group discussions in Malaysia, it is also learnt that some measures are no longer enforced but they remain in the legal texts as the legislations have not been updated.

16. The regulatory rapprochement includes harmonization, MRA or coordination. Harmonization involves the standardization of regulations. MRA involves the acceptance of different forms of regulation amongst countries as “equivalent.” Coordination refers to actions to narrow any significant differences between national-level regulations.

17. The ASEAN Consultative Committee on Standards and Quality (ACCSQ) is working on MRAs among member countries for a variety of products.

18. This includes compliance or enforcement costs, sourcing costs and process adaptation costs.

Additional information

Funding

This work was supported by the European Union H2020 Framework Programme CP-2016-under the grant agreement n°770562 (IF002AB-2018).