The liberalization of world trade under WTO has made the policy of tariff barriers redundant. Countries are no longer allowed to impose discriminatory taxes on imports to help domestic manufacturers or favour specific countries or regions.
Given the inability of countries to support their home industries through direct tariffs, there has been a rapid increase in use of non-tariff measures (NTM). Some NTMs are instruments of commercial policy, while others are justified through non-trade objectives such as environmental protection or food safety.
One of the early examples cited is a blanket restriction on Ayurvedic medicines in the US and Europe based on safety rules and minimum years of documented use.
The article also discusses US restrictions on Mexican tuna based on dolphin-protection rules and the requirement of a Dolphin-Safe label.
These examples show how countries can invoke domestic standards to discriminate against imports. NTMs require careful planning but can still restrict the free movement of goods.
Technical Barriers to Trade and Sanitary and Phytosanitary standards may erode the competitive advantage of developing countries in labour-intensive and agricultural exports.
The article argues that the West has promoted free trade through global bodies such as the WTO while simultaneously developing indirect mechanisms to protect domestic industries.
References:
Non tariff measures to trade
Image source:
http://uk.businessinsider.com/us-trade-balance-august-2015-10?r=US&IR=T