The Costs of Hidden Measures: APEC’s Experience with Non-Tariff Measures (NTMs)

Interconnected supply chains bring economies closer together and foster trade, but such interdependence could make them more vulnerable to trade frictions, such as the implementation of non-tariff measures (NTMs) that restrict trade. However, not all NTMs are harmful. Many serve as policy tools to advance legitimate public policy objectives. Moreover, the presence of NTMs alone does not necessarily mean that there are problems—the stringency of procedures is often more relevant. Against this background, challenges affecting NTMs can be wide-ranging. Managing or addressing these challenges requires economies to strike a delicate balance between pursuing domestic policy objectives and minimizing potential trade-restrictive effects.

The implementation of any NTM inherently involves two economies, one that enacts the measure and the other that is affected by it, and implementing it could involve the participation of several government institutions. In this context, solutions cannot be siloed. Inter-institutional coordinations and dialogues between governments are required. Amid this landscape, APEC’s adoption of the Cross Cutting Principles on NTMs in 2018 provides valuable guidance to develop and implement NTMs, laying the foundations to prevent unjustified barriers to trade.

This policy brief draws insights from APEC’s experience with NTMs and highlights challenges that economies often face. It also provides a set of policy approaches to help policymakers manage these challenges.