28 Nov 2016

Exporters face $US5.9bn in non-tariff trade costs

6:31 pm on 28 November 2016

New Zealand's exporters are facing an estimated $US5.9 billion a year in costs caused by non-tariff measures (NTMs) in the Asia-Pacific region.

Container ship, Napier.

Photo: 123RF

The New Zealand Institute of Economic Research (NZIER) said, while these measures were used to safeguard consumers and animals, many were just blatant protectionism and "designed to shield domestic industries from foreign competition".

"Even a small decrease in the costs of NTMs in the APEC [Asia-Pacific Economic Cooperation] region would improve APEC businesses' competitiveness and lower the costs of doing business. Ultimately this will benefit consumers through cheaper prices for traded goods and services", the institute's deputy chief executive, John Ballingall, said.

The number of non-tariff measures in the region jumped by 74 percent from 814 in 2004 to 1414 in 2015, and the institute said their use rose sharply after the global financial crisis started.

The organisation roughly estimated the overall cost to the 21 APEC nations was $US790bn - three times that of border tariffs.

In New Zealand, Mr Ballingall said the primary sector bore the brunt of the $US5.9bn in extra costs, particularly dairy, meat and horticultural products.

"The dairy sector alone faces NTMs within APEC of $US2.7bn per year," Mr Ballingall said. "Our beef and horticultural sectors suffer too, facing additional costs of $US770 million and $US310m respectively each year."

The institute hoped its research would stimulate further work aimed at reducing the costs of trade in the region.

"There is growing recognition amongst firms, policy-makers and researchers that much more needs to be done by governments to address the high costs of NTMs," Mr Ballingall said.

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