Nontariff Barriers Facing Developing Countries

Abstract

While the preceding analysis demonstrated that the potential exists for a substantial expansion of developing country exports if trade barriers were liberalised, there are a variety of other restraints whose influence appears to be at least the equal of tariffs. For example, evidence suggests that agricultural exports from developing countries are often severely curtailed by complicated systems of nontariff barriers (NTBs) in industrial markets. Specifically, a recent study of the EEC system found that domestic farmers were protected from foreign competition by at least 15 different kinds of nontariff measures ranging from global or bilateral quotas to production subsidies and variable import levies. Similarly, in the area of textiles, where developing countries are acknowledged to have a real comparative advantage in production, developed countries have effectively limited imports through complex systems of quotas and other forms of export restraints. In fact, evidence exists that as tariffs are lowered in international forums such as the Kennedy Round, industrial nations are turning more heavily to nontariff barriers to insulate domestic producers from foreign competition.