UNCTAD seeks balance between regulations, consumer protection

UNCTAD Secretary-General, Mukhisa Kituyi

UNCTAD Secretary-General, Mukhisa Kituyi

Regulators must strike a delicate balance between protecting consumers and the environment on the one hand and not restricting trade on the other, the United Nations Conference on Trade and Development (UNCTAD) has said.

Indeed, with global trade set to grow at its slowest pace since 2009, some analysts now see new opportunity for trade growth in the more efficient application of health, environmental and other regulations, commonly known as non-tariff measures (NTMs).

According to UNCTAD, the flow of goods and services between countries remains one of the most important drivers of job creation and prosperity, and its sluggish pace is prompting anxiety, as the real untapped potential for further trade growth lies in regulation.

“Regulations should be designed and implemented in smart ways that maximize non-trade objectives – that is to protect consumers, the environment, plants and animals – while not negatively impacting the movement of goods and services,” UNCTAD Secretary-General Mukhisa Kituyi said.

“We have to find a balance between improving smart regulations and the facilitation of trade,” he said.As tariffs have fallen to historic lows, NTMs have continued to grow. They now affect some 96% of global trade.

UNCTAD noted that one growing concern is that NTMs disproportionately affect the kinds of agricultural and textile goods produced in the poorest countries.

“We found that the inability of Least Developed Countries to comply with NTMs from G20 countries cost them an estimated $23 billion a year,” he said, adding that removing these measures could boost LDC exports by 15%.

Despite the growing prevalence of NTMs, researchers and policy makers still lack data and common definitions. A new NTM database, launched by UNCTAD and six other bodies in July 2016, helps to fill these gaps.

The database classifies NTMs by both product and restriction. It now covers 57 countries amounting to over 80% of world trade. It will also benefit producers.

A professor from the University of Sussex, Alan Winters, said the next challenge will be to aggregate the data and to look more closely at how different measures affect trade in specific sectors.

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Mukhisa KituyiUNCTAD
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