Non-tariff barriers costing Kiwi firms billions each year, NZIER says

28 November 2016

New Zealand Institute of Economic Research (Inc)
Media release, 28 November 2016
For immediate release

A new public discussion paper from NZIER has estimated the cost of non-tariff measures (NTMs) on trade in the APEC region. It shows that New Zealand’s exporters face NTMs that impose costs of US$5.9 billion.

“Non-tariff measures are policies aside from border tariffs put in place by governments to limit imports or increase their price. 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 NZIER’s Deputy Chief Executive John Ballingall.

“But many are blatantly protectionist in nature – designed to shield domestic industries from foreign competition”, he added.  

Dairy, meat and horticultural products suffer most

NZIER estimate that the overall cost of NTMs within APEC is estimated to be US$790 billion – three times as much as the costs associated with simple border tariffs.  
“New Zealand’s primary sector exporters bear the brunt of APEC economies’ NTMs. The dairy sector alone faces NTMs within APEC of US$2.7 billion per year”, said Ballingall. “Our beef and horticultural sectors suffer too, facing additional costs of US$770 million and US$310 million respectively each year”.

Reducing the costs of NTMs will improve competitiveness and living standards – but concerted effort is required

“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”, Ballingall noted.

“The priority should be on those NTMs that are 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”, said Ballingall.

“We hope that by shining a light on the costs of NTMs, our research can spark further discussions about the types of institutions and processes that could be used to reduce their most damaging effects”, Ballingall concluded.  

The full paper can be read here.

For further information, please contact:
John Ballingall
Deputy Chief Executive
04 470 1804 or 021 6106 477
john.ballingall@nzier.org.nz

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