Non-tariff measures raise specific concerns for GVC participation

Beyond administrative procedures at the border, there is a range of non-tariff measures that also affect producers along the value chain. Although non-tariff measures should not have protectionist intent, they nevertheless can have an impact on trade costs that is of much larger magnitude than tariffs (Figure 12).

Figure 12. Average level of restrictiveness imposed on imports
(agricultural and manufactured goods)

Source: UNCTAD (2013), based on UNCTAD TRAINS/WITS database.

Further increases in trade costs can originate from the required compliance with a multitude of standards and technical regulations which may be particularly burdensome for SMEs that participate in GVCs.

The rising number of quality and safety standards is in part driven by concerns about information, coordination and traceability which are more acute in a world dominated by GVCs. While the need to protect final consumers through appropriate quality standards is clear, the complexity and above all the heterogeneity of such standards has become one of the main barriers to insertion into GVCs, in particular for small and medium-sized enterprises.

Upstream firms supplying components to several destinations may have to duplicate production processes to comply with conflicting standards, or incur burdensome certification procedures multiple times for the same product. In food value chains, process standards adapted to one country’s suppliers may render exporting to another country infeasible. Promoting the convergence of standards and certification requirements and encouraging mutual recognition agreements can go a long way to alleviating the burden of compliance and enhancing the competitiveness of small-scale exporters.

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