The real barriers to trade are no longer tariffs
The article highlights that Non-Tariff Barriers (NTBs) have become more significant obstacles to global trade than traditional tariffs. While tariffs have decreased significantly since the WTO's establishment, NTBs, such as regulations, certifications, and product requirements, have surged, affecting about 90% of global trade. The EU is noted as the most extensive user of regulatory tools, while the US employs NTBs for strategic competition. India, traditionally reliant on tariffs, is now expanding quality regulations as part of its industrial strategy. The article points out that India's low FTA utilization rates (around 25%) are largely due to NTBs, citing examples with ASEAN, Japan, and South Korea. It concludes by emphasizing that India's newer trade agreements, like with the UAE and EFTA, are explicitly addressing NTB reduction through mutual recognition and legally binding obligations, signaling a crucial shift in trade diplomacy.
The article highlights that Non-Tariff Barriers (NTBs) have become more significant obstacles to global trade than traditional tariffs. While tariffs have decreased significantly since the WTO's establishment, NTBs, such as regulations, certifications, and product requirements, have surged, affecting about 90% of global trade. The EU is noted as the most extensive user of regulatory tools, while the US employs NTBs for strategic competition. India, traditionally reliant on tariffs, is now expanding quality regulations as part of its industrial strategy. The article points out that India's low FTA utilization rates (around 25%) are largely due to NTBs, citing examples with ASEAN, Japan, and South Korea. It concludes by emphasizing that India's newer trade agreements, like with the UAE and EFTA, are explicitly addressing NTB reduction through mutual recognition and legally binding obligations, signaling a crucial shift in trade diplomacy.
Exam linkage
GS Paper 3: Indian Economy (External Sector, Trade Policy, Industrial Policy, Effects of Liberalization); GS Paper 2: International Relations (International trade agreements, WTO, bilateral relations).
Syllabus mapping
This topic appears in Mains
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