Updated February 14, 2024
Non-Tariff Measures (NTMs): An Overview
U.S. exporters’ access to foreign markets increasingly
arbitrarily and with the implicit intent to restrict imports. In
depends on compliance with a diverse array of non-tariff
practice, it is challenging to distinguish between
measures (NTMs) that governments have designed to
permissible and protectionist NTMs, as one country’s stated
achieve various public policy objectives. As tariffs on
policy concerns may be seen as disguised protectionism or
international trade have decreased globally, NTMs have
trade-distorting by its trading partners.
become central to market access concerns and trade
Types of NTMs
negotiations. While trade rules permit the use of NTMs to
The UNCTAD International Classification of NTMs
ensure consumer health, protect the environment, and
follows a taxonomy of policy measures that have the
safeguard national security, some information suggests that
potential to affect trade (Figure 1). Import-related NTMs
some governments impose these measures primarily to
are classified as “technical” or “non-technical.” Technical
protect their domestic industries from foreign competition.
measures comprise sanitary and phytosanitary measures
Some economists and policymakers contend that foreign
(SPS), technical barriers to trade (TBT), and pre-shipment
governments’ misuse of NTMs is outweighing the positive
inspections. These NTMs are not necessarily discriminatory
effects of reduced tariffs. Some Members of Congress have
because they generally apply to both domestic and imported
expressed interest in understanding these measures, NTMs’
goods and are often motivated by safety, health, national
potential to reduce U.S. businesses’ opportunities to export,
security, and related domestic policy concerns. They may
innovate, and support jobs, and how NTMs are addressed
also serve to correct for market failures (e.g., by reducing
within the rules-based, global trading system. Congress
information asymmetries through qualitative measures like
may also consider ways to reduce potential burdens from
labelling requirements) and to protect the environment (e.g.,
U.S. and foreign NTMs in an effort to bolster trade.
by restricting imports of pollutants). Non-technical
What Are Non-Tariff Measures (NTMs)?
measures include traditional trade policies such as quotas,
subsidies, and trade remedies (e.g., measures to address
While there is no official definition, NTMs generally
unfairly traded goods).
encompass all mandatory government requirements, rules,
and regulations that impose informational, compliance-
Figure 1. International Classification of NTMs
related, and procedural costs that affect trade flows of
goods and services. The United Nations Conference on
Trade and Development (UNCTAD), among other
international organizations, defines NTMs as “policy
measures, other than ordinary customs tariffs, that can
potentially have an economic effect on international trade in
goods [by] changing quantities traded, or prices or both.”
This broad definition includes measures that are as different
from each other as they are collectively different from
tariffs. However, beyond such a definition, ultimately, most
policies can affect trade. NTMs can both hinder and
facilitate trade.
Some observers have remarked that while multilateral trade
negotiations and free trade agreements (FTAs) have
reduced tariffs, domestic pressures for protection against
imports are more likely to result in a government’s
enactment of NTMs. For instance, these observers contend
that firms in an import-competing industry might pressure a
government to impose more stringent regulations if these
firms would find it easier than foreign competitors to
comply with those regulations. These and other

protectionist measures are generally referred to as non-tariff
Source: Figure by CRS based on UNCTAD.
barriers (NTBs). NTBs discriminate against foreign
products and suppliers to the advantage of domestic ones.
Closely related to NTMs, procedural obstacles are practical
Although some NTMs can be defined as NTBs (e.g., quotas
challenges related to how NTMs are implemented and/or
or import prohibitions), whether other forms of NTMs can
enforced. These may include understaffed ports of entry,
be considered NTBs depends largely on how they are
long delays in certification, or lack of adequate information
implemented or applied. Health standards, for example, are
on regulations. Research has suggested that it is often the
not categorized as NTBs except when they are applied
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Non-Tariff Measures (NTMs): An Overview
procedural obstacles associated with NTMs that are most
are unable to comply with the NTMs or if imports are
burdensome to exporters, rather than NTMs themselves.
replaced by domestic products). For example, when NTMs
compel exporters to abide by a set of product specifications
NTMs and World Trade Organization (WTO)
designed to improve consumer awareness, the measures
Agreements
might reduce competition from noncompliant firms as
In response to the rise of NTMs, governments have developed bilateral
demand for products from compliant exporters increases.
and multilateral frameworks regulating their use. Most trade
agreements address different types of NTMs. Three relevant WTO
U.S. Assessment of Foreign Trade Barriers
agreements are the: General Agreement on Tariffs and Trade 1994
Every year since 1985, the Office of the U.S. Trade Representative
(GATT), Agreement on Technical Barriers to Trade (TBT Agreement),
(USTR) has published the National Trade Estimate Report on Foreign
and Agreement on the Application of Sanitary and Phytosanitary
Trade Barriers (NTE Report). This report catalogs “significant” foreign
Measures (SPS Agreement). GATT provisions seek to ensure that
trade barriers—formal and informal—affecting U.S. exports of goods
WTO members abide by trade liberalization commitments and do not
and services, e-commerce, cross-border data flows, foreign direct
reimpose protection through domestic policies (e.g., NTMs) that
investment, and protection of IPR. While it addresses trade barriers
discriminate against imports. The TBT Agreement aims to standardize
in general, the discussion and analysis tend to focus on NTMs with
technical regulations and their application. The SPS Agreement requires
trade and investment implications. USTR bases the report on
members to base measures for the protection of human, animal, or
information compiled by the interagency Trade Policy Staff
plant life or health on international standards. Both the TBT and SPS
Committee and provided by members of the private sector trade
Agreements restrain members from applying standards that are “more
advisory committees, U.S. embassies abroad, and the public in
trade-restrictive than necessary to achieve a legitimate objective.” (A
response to USTR notices published in the Federal Register.
member’s NTM that is inconsistent with its WTO obligations could
The 2023 NTE Report covers 64 foreign markets, which together
potential y be applied under one of GATT Article XX’s general
comprise 99% of U.S. goods trade and 66% of U.S. services trade.
exemptions [or Article XVIII], for example.)
Focus areas in the 2023 report include agriculture, digital trade,
Other WTO agreements, as wel as U.S. FTAs, also aim to address
industrial policies, technical barriers, and labor. Some of the al eged
various bureaucratic or legal issues that could involve hindrances to
barriers are new, whereas others reflect long-standing U.S. concerns
trade, such as rules of origin, subsidies, public procurement, investment,
and have been included in prior iterations of the report.
intellectual property rights (IPR), import licensing, customs valuations,
and pre-shipment inspections.
Considerations for Congress
Trade and Economic Effects
During the past five decades, some Members of Congress
Despite NTMs’ widespread use, many argue the diversity
have sought to reduce the often-unintended costs of NTMs
and complexity have prevented a full understanding of their
for U.S. exporters, while supporting provisions in U.S.
prevalence and effects on trade and economic welfare.
FTAs and GATT/WTO agreements that preserve the right
NTMs have varied effects that cannot be easily generalized
of countries to regulate imports to meet certain objectives,
or measured. These effects are often subtle, indirect, and
such as health or environmental protection. In recent years,
case-specific. For example, the application/administration
some Members have also shown an interest in negotiating
of NTMs is generally country-specific; identical NTMs
high-level commitments with U.S. trading partners to
may have different effects depending on their
increase transparency and openness in the development of
implementation and enforcement. Additionally, a lack of
NTMs. This has particularly been the case as the United
information on NTMs complicates the assessment of their
States seeks to respond to standard-setting practices of other
impact on trade. Efforts led by UNCTAD (data collection)
countries that may have global reach or contain aspects that
and the WTO (notification mechanisms) have sought to
they consider to be unduly protectionist and discriminatory.
address these challenges. At the same time, notification
Should Members of Congress seek to engage with the
mechanisms, for instance, are generally incomplete and
Biden Administration to shape the U.S. policy towards
relevant information on NTMs is often embedded in legal
trade barriers, Members may consider whether or not to call
and regulatory documents, making the gathering of data and
on the Administration to intensify U.S. efforts to monitor
comparison between countries difficult and costly. Unlike
and address tariffs and NTMs. Such efforts could focus on
tariffs, NTM data are not merely numbers that can be easily
measures that may be inconsistent with trade agreements to
integrated into economic models. The uncertainty
which the United States is a party, or that otherwise may be
originating from the knowledge gap on NTMs tends to
seen as unjustified or as significant barriers to U.S. exports.
reinforce the perception of potential deleterious effects.
Members may also encourage the Administration to work
Analytical studies often conceptualize NTMs as additional
with trading partners to update trade agreements and
costs to trade. Regulations, for instance, can increase the
develop cross-cutting disciplines on regulatory practices
cost of exporting, particularly if they differ significantly
that have been known to support economic growth, market
from those applied at home. Firms wishing to export may
integration, and removal of trade barriers. This includes the
face additional trade costs related to identifying and
promotion of greater transparency in the development of
processing information on relevant requirements in the
regulations, evidence-based analysis/decisionmaking, and a
target market (information costs); adjusting the product or
whole-of-government approach to regulatory management.
production process to the requirements of the importing
Congress may also examine ways to increase regulatory
country (specification costs); and proving that they have
compatibility in specific sectors through a range of tools
met these requirements (conformity assessment costs).
(e.g., mutual recognition agreements) aimed at reducing or
These costs could then lead to trade diversion (if market
eliminating regulatory differences with major trading
share increases for those exporting countries already
partners that U.S. policymakers and stakeholders deem
complying with the standards), trade creation (if standards
unnecessary, while taking into account U.S. interests in
affect import-demand positively in the country imposing
health, safety, and environmental protection.
the regulation), or trade destruction (if foreign producers
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Non-Tariff Measures (NTMs): An Overview

IF12528
Andres B. Schwarzenberg, Specialist in International
Trade and Finance


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https://crsreports.congress.gov | IF12528 · VERSION 3 · UPDATED

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