UNCTAD: Hidden Trade Barriers, Not Tariffs, Are Driving Export Costs Higher

UN Trade and Development is warning that the biggest barriers to global trade are increasingly found not in tariffs, but in the technical, regulatory and certification requirements exporters must navigate to reach foreign markets.

In its May Global Trade Update, UNCTAD said non-tariff measures — including technical rules, health and safety standards, and certification procedures — now exceed tariff costs in 88% of cases, making them the dominant driver of export costs for most countries. 

The burden is falling hardest on developing and least developed economies, which face the double hit of rising tariffs and higher compliance costs. UNCTAD said least developed countries lose around 10% of their exports to G20 markets because they cannot meet these requirements. 

The report does not argue for eliminating such rules, which often support health, safety and environmental protection. Instead, UNCTAD says the problem is how opaque and fragmented they can be. Better transparency alone could reduce trade costs linked to non-tariff measures by about 19%, while unreported requirements can impose costs equivalent to a 28% tariff. 

UNCTAD said stronger regulatory cooperation, clearer notification systems and targeted support for smaller exporters could help reduce unnecessary costs while preserving legitimate standards.

Without those steps, the agency warned, global trade risks becoming more restrictive in practice even where tariffs remain relatively low.

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