Wine Industry Strategic Exercise (WISE)
In an increasingly competitive international wine trade environment, the Wine Industry Strategic Exercise has identified a need for a non-tariff barrier (NTB) analysis, which is now being conducted.
To strengthen South Africa’s position in the international wine market, a non-tariff barrier analysis seems useful. This could serve as a valuable input for our government’s trade agenda on wine in bilateral and multilateral trade engagements. An understanding of NTBs could also provide useful insights into the practical commercial implications thereof for the South African wine exporter, enabling recommendations for the wine industry per NTB.
NTBs are typically used by governments to specifically discriminate between imported and locally produced products in the export country. As such it is important that these NTBs identified for SA wine exports be removed to ensure improved market access to key export markets. The analysis will follow the framework of the United Nations Conference on Trade and Development (UNCTAD) classification of NTBs, providing a categorisation of the various NTBs applied in practice.
“While Free Trade Agreement (FTA) negotiations tend to focus on tariffs and the reduction thereof, one cannot underestimate the impact of NTBs on international trade, and this research will equip our government negotiators to address other issues that impact negatively on our international wine trade,” explains the CEO of the South African Liquor Brand Owner Association, Kurt Moore.
With regard to lobbying actions with government, the analysis could prioritise the list of NTBs for lobby actions. These would typically be those NTBs that are the most severe in terms of commercial impact occurring in the industry’s top priority markets. This could in turn enable the identification of the key government/non-government stakeholders relevant to the NTB, which should be lobbied by the industry for its removal or alteration.
Non-tariff measures (NTMs) and in particular technical measures have become a prominent feature in the regulation of international trade in goods. The bulk of technical regulations are grouped in two major categories, namely sanitary or phytosanitary (SPS) measures and technical barriers to trade (TBTs). The former includes regulations and restrictions to protect human, animal or plant life or health, while the latter addresses all other technical regulations, standards and procedures.
SPS measures and TBTs are the objects of two World Trade Organization (WTO) agreements that impose disciplines to trade that go beyond the usual non-discrimination. Independently of their objective and legal framework, SPS measures and TBTs can have important effects on international trade. In terms of incidence, TBTs are by far the most used regulatory measures, with the average country imposing them on about 30 per cent of products and trade.
Countries also impose SPS measures on an average of approximately 15 per cent of trade. The large incidence of TBT and SPS measures raises concerns for developing countries’ exports. These measures impose quality and safety standards which often exceed multilaterally accepted norms.
The NTBs project is a crucial step in ensuring South Africa’s competitiveness in the international market. Work in this regulatory environment could be a catalyst for further efforts to negotiate a favourable playing field pertaining to free trade and similar encouraging agreements.
The South African wine industry is in the process of developing a new strategic framework aimed at improving competitiveness and coherence through, inter alia, more focused communication and an industry-wide governance structure.