International Trade

Trade in Goods - TBT

Technical regulations and product standards may vary from country to country. Different regulations and standards make it difficult for producers and exporters to cater to different markets. So, if regulations are set arbitrarily, they could be used for protecting the domestic industry and can become obstacles to trade. The Agreement on Technical Barriers to Trade (the "TBT Agreement") tries to ensure that regulations, standards, testing and certification procedures do not create unnecessary obstacles. But at the same time, the TBT Agreement recognizes the countries' rights to adopt the standards they consider appropriate — for example, for human, animal or plant life or health, for the protection of the environment or to meet other consumer interests. The WTO members are not prevented from taking measures necessary to ensure their standards are met. But to prevent such diversity, the Agreement encourages countries to use international standards where these exist, but does not require them to change their levels of protection as a result.

The TBT Agreement also sets out a code of good practice for the preparation, adoption and application of standards by the central government bodies. It also includes provisions describing how local government and non-governmental bodies should apply their own regulations — normally they should use the same principles as the central governments.

Technical regulations and standards set out specific characteristics of a product — such as its size, shape, design, functions and performance, or the way it is labelled or packaged before it is put on sale. In certain cases, the way a product is produced can affect these characteristics, and it may then prove more appropriate to draft technical regulations and standards in terms of a product's process and production methods rather than its characteristics per se. The difference between a standard and a technical regulation lies in compliance. While conformity with standards is voluntary, technical regulations are by nature mandatory.

Conformity Assessment Procedures are technical procedures — such as testing, verification, inspection and certification — which confirm that products fulfill the requirements laid down in regulations and standards.

Each WTO-Member country is required to notify all its new or amendments of existing TBT related standards/regulations including labelling requirements which are either not based on the relevant international standards or having significant trade effects (both positive and negative) or where no international standards/guidelines exist. Members are also obliged to notify such TBT measures to the WTO at an early appropriate stage and provide at least 60 days time for comment of other Members so that changes, if any, based on such comments of other Members can be accommodated before the standards / regulations are put in force.

A Member does not need to notify all its standards/regulations or conformity assessment procedures to the WTO. A Member is required to notify only those regulations which fulfil the following conditions:

• the proposed standard/regulation or conformity assessment procedure is at variance with the internationally accepted standards/regulations or conformity assessment procedures or guidelines;

• there are significant trade effects (positive or negative) associated with the proposed standard/regulation or conformity assessment procedure.

• there is no such international standard/regulation or conformity assessment procedure or guideline existing.

Members are also required to fulfil the notification obligations for the measures of local governments, at the level directly below that of Members' central governments. However, notification is not required when a technical regulation or a conformity assessment procedure is "substantially the same" as a measure already notified by the central government body.

A single central government authority is responsible for all issues related to notifications. In India, the Department of Commerce, Ministry of Commerce & Industry is the National Notifying Agency (NNA).

Following format is used for the notification:

Under the TBT Agreement, each Member is mandated to create an Enquiry Point.

In India, the Bureau of Indian Standards (BIS) has been designated as the WTO-TBT Enquiry Point. Functioning of the Enquiry Point is shown below:

Since 1995, a number of notifications have been made to the WTO. Year-wise notifications can be seen below:

The average number of notifications per year is 600. 84 WTO Members have notified at least one TBT measure. One-third of Members have submitted less than ten notifications, while two Members have made more than three hundred notifications each. Nearly all developed and almost two-thirds of the developing countries Members have submitted notifications. Conversely, only a few least-developed countries (LDCs) have done so.

Objectives as mentioned in these Notifications are as below:

Some of the Acts/ Regulations/ Control Orders for regulating trade in India are:

• Prevention of Food Adulteration Act, 1954 -

• Plant Quarantine (Regulation of Import into India) Order, 2003.

• Meat Food Product Order 1973

• Milk and Milk Product Order 1992

• Bureau of Indian Standards Act, 1986

• Standards of Weight and Measures Act, 1976

• Livestock Importation Act, 1898.

• AGMARKAct, 1937

• The Infant Milk Substitutes, Feeding Bottles and Infant Foods Act, 2002

• Export (Quality Control and Inspection) Act, 1963

• Essential Commodities Act, 1955.

• Indian Explosives Act, 1884

• Energy Conservation Act, 2001

Some important agencies involved in quality regulations are:

• Directorate General of Health Services - PFA

• Ministry of Food Processing Industry - FPO

• Department of Consumer Affairs - BIS & EC Acts

• Directorate of Marketing and Inspection - AGMARK

• Department of Agriculture & Cooperation - Plant Quarantine

• Department of Animal Husbandry and Dairying - MMPO

• Department of Legal Metrology - Weights & Measures Act

• Bureau of Energy Efficiency - Energy Conservation Act

• Chief Controller of Explosives - Indian Explosives Act

• Directorate General of Mines Safety - Coal Mines Regulations

• Department of Road Transport and Highways - CMVR

• Central Pollution Control Board - Pollution Control

The regulators for foreign trade are:

1. For Imports:

• Directorate General of Foreign Trade (DGFT)

• Relevant Regulatory Agency

• BIS for 109 products

2. For Exports:

• Export Inspection Council for about 1000 notified products (Food, footwear, chemicals, engineering, leather, jute etc.)

All requirements and restrictions on trade are regulated through the Foreign Trade (Development and Regulation) Act 1992 which falls under the purview of the DGFT. Under section 5 of this Act, the Foreign Trade Policy is issued, which is valid for 5 years but can be amended as needed. The Central Board of Excise and Customs (CBEC) under the Ministry of Finance publishes all the relevant acts, tariffs, rules, regulations, forms, notifications, circulars, relating to customs, central excise, and service tax both on its website as well as in the print form. The regulation and rules come to effect through a notification published in the official Gazette of India and are published under tariff/non-tariff headings.

India till date has submitted 66 TBT notifications to the WTO. Indian notifications in the new WTO format (since 2002) are as below.

Notifications by other countries can be accessed at WTO Simple Search.

The effect of environmental measures on market access is being discussed in the CTE. A brief on the subject is available in the Trade and Environment Section. India had submitted two papers on the subject so far:

• WT/CTE/W/177 - "the study of the effects of environmental measures on market access"; and

• WT/CTE/W/207- "the effects of environmental measures on market access, especially in relation to developing countries, in particular the least-developed among them".

To increase consumer awareness, the Government of India had launched the eco-labelling scheme known as ' Ecomark' in 1991 for easy identification of environment-friendly products. Any product which is made, used or disposed of in a way that significantly reduces the harm it would otherwise cause the environment could be considered as Environment-Friendly Product. The specific objectives of the scheme are as follows:

1. To provide an incentive for manufacturers and importers to reduce the adverse environmental impact of products.

2. To reward genuine initiatives by companies to reduce the adverse environmental impact of their products.

3. To assist consumers to become environmentally responsible in their daily lives by providing information to take account of environmental factors in their purchase decisions.

4. To encourage citizens to purchase products which have less harmful environmental impacts.

5. Ultimately to improve the quality of the environment and to encourage the sustainable management of resources.

The Government of India has notified the final criteria for the following 16 product categories: Soaps & Detergents, Paper, Food Items, Lubricating Oils, Packaging Materials, Architectural Paints and Powder Coatings, Batteries, Electrical/Electronic Goods, Food Additives, Wood Substitutes, Cosmetics, Aerosol Propellants, Plastic Products, Textiles, Fire-extinguisher, and Leather.

More details of the Ecomark Scheme can be seen at the Ministry of Environment and Forests website.

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