The positive impacts of Non Tariff Measures are i Better Foreign Direct Investment ii Improved Quali...........

Economic and Social Issues Liberalization, Privatization and Globalisation

According to recently published “The Asia-Pacific Trade and Investment Report 2019”, non-tariff measures (NTMs) have increased in the past two decades. Non-tariff measures (NTMs) are policy measures — other than ordinary customs tariffs — that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both. A detailed classification is therefore critical in order to clearly identify and distinguish among the various forms of NTMs. The International Classification of NTMs follows taxonomy of all measures considered relevant in today's international trade. This classification comprises technical measures, such as sanitary or environmental protection measures, as well as others traditionally used as instruments of commercial policy, e.g. quotas, price control, exports restrictions, or contingent trade protective measures, and also other behind-the-border measures, such as competition, trade-related investment measures, government procurement or distribution restrictions.

The positive impacts of Non Tariff Measures are:

i Better Foreign Direct Investment

ii Improved Quality of Goods

iii Development of International Standards

iv Protection of human health and environment

Select the correct answer using the code given below

i. ii and iii only

i. ii and iv only

All of the above

None of these

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Explanation:

Positive Impact of NTMs

•Impact on Foreign Direct Investment (FDI): Certain NTMs could boost FDI, as they motivate a firm to pursue FDI instead of trade E.g. Government procurement restrictions and local content requirements (LCR) may sway a firm towards FDI.

•Development of International Standards: The WTO SPS and TBT Agreements are aimed at striking a balance between the public policy objectives of protecting health, safety and the environment, and the policy goal of trade facilitation and help in the development of international standards.

•Protection of human health and environment: Recently, European Union (EU) instituted an import ban on Sri Lankan seafood because of the country’s systematic failure to regulate illegal, unreported and unregulated (IUU) fishing. Although led to initial decline in income, the ban helped in conservation of marine resources and encouraged sustainable fishing.