Analysis of Agri-Food Trade Structures
To Promote Agri-Food Trade Networks
In the Islamic Countries
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Agreement on Sanitary and Phyto-Sanitary (SPS) Measures and the Agreement on Technical
Barriers to Trade (TBT). In general, countries remain free to deploy appropriate regulations to
protect consumers but are required to ensure that there is a scientific basis for it, and that it is
not a disguised restriction on trade.
Unlike tariffs, NTMs cannot easily be summarized in a numerical measure. The reason is that
they are regulations that are not strictly comparable from one product or measure to another.
Some degree of econometric modeling is typically necessary to make an assessment of the
restrictiveness of different NTMs. Moreover, there is no comprehensive global database of NTMs
in force. The United Nations Conference on Trade and Development (UNCTAD) Trade Analysis
Information System (TRAINS) database only provides partial information: it is limited in terms
of the types of NTMs it covers, but is also in the course of being extended and updated, so country
coverage is limited, in particular in the developing world. Summary measures from TRAINS are
not reflective of overall world patterns, but only of data for those particular countries that are
included. It is also impossible to produce a dynamic picture similar to the one for tariffs due to
limited data availability.
To give a picture of the overall combined impact of tariff barriers and NTMs, the analysis uses
an alternative source, the United Nations Economic and Social Commission for Asia and the
Pacific (UNESCAP)-World Bank Trade Costs Database. 13 This database uses economic theory
combined with data on the global pattern of trade and production to infer the ratio of
international to domestic trade costs in ad valorem equivalent terms. It implicitly captures all
factors that drive a wedge between producer prices in the exporting country and consumer
prices in the importing country, including tariffs, as well as the full range of NTMs. Trade costs
measured in this way are typically much higher than ad valorem tariffs, because a far wider
range of factors are included. Because of limitations in the source data, it is not possible to
undertake the analysis using the Annex 1 classification. It is only possible to present data for an
aggregate agricultural sector that includes all agricultural goods as used in standard input-
output table classifications.
Figure 15 shows that as in the case of tariffs, there is an overall downwards trend in trade costs
in agricultural goods. However, it is less pronounced than in the case of manufacturing: trade
costs for the latter fell by 12% over two decades, compared with only 8.5% for agriculture.
Moreover, trade costs in agriculture are much higher than in manufacturing. Given that
manufacturing tariffs are lower than in agriculture in most countries, the difference must be due
to NTMs. These data therefore strongly suggest that NTMs are significantly raising trade costs
in agricultural sectors. Although the trend is clearly downwards, distortions to world markets
for agricultural products remain significantly higher than for manufactured goods. This finding
has particular implications for developing countries with significant natural resources but a
limited industrial base: it may be harder for them to access foreign markets than it is for
exporters of manufactured goods.
13 Arvis, J.F., Y. Duval, B. Shepherd, C. Utoktham, and A. Raj. 2016. “Trade Costs in the Developing World: 1996-2010.” World
Trade Review, 15(3): 451-474.