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World Trade Organization Toolkit : Non-Tariff Barriers to Trade

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Standards and Technical Regulations

Obstacles to trade may arise from measures imposed at the "borders" such as duties, quotas, customs valuations, etc. Obstacles to trade may also result from internal legislation.

Under the principle of National Treatment included in Article III of the GATT, internal legislation must not discriminate between domestic and imported goods. There are examples of situations in which a country clearly discriminates against imported goods. For instance, domestic legislation requiring that imported cars comply with specific standards which locally-produced like products do not have to comply with. However, there may be more subtle forms of discrimination, i.e. cases in which the national legislation, even if not de jure discriminatory, has the intent or the effect of discriminating against domestic products. This is so-called de facto discrimination.

In addition, trade distortions may arise from disparate national regulations notwithstanding the fact that they apply equally to domestic and imported goods. A specific example of this problem refers to standards and technical regulations adopted in order to protect the environment, health and consumer safety. Such kind of legislation, even if not discriminatory de jure or de facto, may well result in creating obstacles to trade simply by the fact that standards and technical regulations vary greatly from one country to another. For instance, a company which produces toys in country A and complies with the conditions aimed at protecting health and safety of children in that country, may well have to comply with other standards or conditions if it wants to export its toys to country B. In that respect, standards and technical regulations are said to create obstacles to trade.

The original GATT adopted in 1947 does not contain specific provisions relating to the use of standards and technical regulations. However, GATT's general provisions apply to such measures. Under Article III of the GATT, Members are prevented from applying discriminatory standards between domestic and imported goods. However, demonstrating discrimination may prove to be difficult in specific cases.

In addition, even if a regulation was found to violate a provision of the GATT, it could still be exempted under Article XX of the GATT which provides for exceptions to the GATT obligation in specific cases and, among other things, where "(b)necessary to protect human, animal or plant life or health".

Article XX has generally been interpreted narrowly to limit the extent of trade restrictive environmental health and safety regulations. Provisions were only considered "necessary" if there was no other less GATT-inconsistent regulation available to fulfil the objective.

The absence of specific provisions dealing with the issue of standards and technical regulations has become an increasing problem as there has been a steady growth in the use of standards and technical regulations. The increasing use of those regulations is closely connected to the decreasing use of borders' barriers to trade including duties, quotas, etc. It is also closely related to the evolution of mentality.

A first attempt to address the issue of standards and technical regulations adopted to protect so-called goals of safety, health and environment, was made through the "Standards Code" negotiated during the Tokyo Round in 1979. That Code, however, was insufficient to address effectively the issue of technical standards and the Uruguay Round elaborated the Standards Code into two new agreements on Standards: the Agreement on Sanitary and Phytosanitary Measures (SPS) which deal specifically with measures aimed at protecting the environment, human and plant health; and the Agreement on Technical Barriers to Trade (TBT) which covers all technical measures not covered by the SPS Agreement.

Learn more about the Agreement on Sanitary and Phytosanitary Measures

Learn more about the Agreement on Technical Barriers to Trade

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