Page 9 - ASEAN-EU Dialogue 2018: Regional and Inter-Regional Economic Cooperation: Identifying Priorities for ASEAN and the EU

In the case of TBTs and SPS measures, Ing and Cadot (2017a) show that the ad valorem
equivalents (AVEs) of these NTMs are much higher than the weighted average tariffs (see
Figure 2.2). The key concern related to NTMs is that not all the AMS have clear and
transparent rules on their measures (Ing and Cadot, 2017b), resulting in unclear regulations that
increase the transaction cost of businesses. Further, there is a general lack of detection of
harmful standards in that the ‘harm’ is not visible when it is not directly related to the measure
or requirement itself, but originates from the application and the administration (involving
implementation and enforcement) of the NTM, which is country specific. In some instances
(not for all cases), the NTM is designed in such a way as to serve a dual purpose; impart an
intentionally protectionist effect while serving a public policy objective. Procedural obstacles,
therefore, are considered a result of poorly designed standards and technical measures,
notwithstanding the motivation for those measures. Some of these burdensome NTMs are
detected through country specific business surveys.

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Tariff (P) AVE SPS (Agri Food) Tariff (M) AVE TBTs (M)

Notes: SPS – sanitary and phytosanitary; TBT – technical barriers to trade; AVE – ad-valorem equivalent; P –
primary and agricultural products; and M – manufactures.
Source: Derived from the ERIA-UNCTAD (2016) database.

Figure 2.2: ASEAN - Tariffs vs AVEs of SPS and TBTs, 2016/ 2017 (percentage)

One common barrier is overlapping, complicated cross-bureaucracy and somewhat conflicting
responsibilities of regulators. This is not surprising, as standard-like NTMs motivated by
various policy objectives, involve multiple regulators beyond the Ministry of Trade/Commerce
(agriculture, fisheries, health and environment) in the respective AMS. In Indonesia, the
problem is more compelling as some national regulations for imports even conflict with local
by-laws. Though national regulations dictate import policies, regional governments issue
additional requirements for imports to enter their jurisdiction. This is noted in the case of
imports of alcoholic beverages (Patunru and Rahardja, 2015). Further, delays for fumigation

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