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Global value chain integration and non-tariff measures

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  • Garcés, Irene
  • Vogt, Achim

Abstract

This paper investigates the degree to which domestic value added embodied in gross trade determines the formation of non-tariff measures (NTMs) imposed at the border and regulatory differences in technical regulation. We apply a recently developed political economy model of trade policies and global value chains to indicators of NTM restrictiveness. Our results demonstrate that higher domestic value added content in imports lowers policy makers’ incentives to impose trade restrictive NTM policies in a similar way as tariffs. These effects are heterogeneous with respect to sectors and income group of the policy-imposing country.

Suggested Citation

  • Garcés, Irene & Vogt, Achim, 2024. "Global value chain integration and non-tariff measures," Economics Letters, Elsevier, vol. 235(C).
    • Handle: RePEc:eee:ecolet:v:235:y:2024:i:c:s0165176524000028
    DOI: 10.1016/j.econlet.2024.111518
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    1. Zhaohui Niu & Chris Milner & Saileshsingh Gunessee & Chang Liu, 2020. "Are nontariff measures and tariffs substitutes? Some panel data evidence," Review of International Economics, Wiley Blackwell, vol. 28(2), pages 408-428, May.
    2. Bown, Chad P. & Erbahar, Aksel & Zanardi, Maurizio, 2021. "Global value chains and the removal of trade protection," European Economic Review, Elsevier, vol. 140(C).
    3. Kee, Hiau Looi & Nicita, Alessandro, 2022. "Trade fraud and non-tariff measures," Journal of International Economics, Elsevier, vol. 139(C).
    4. Robert W. Staiger & Alan O. Sykes, 2011. "International Trade, National Treatment, and Domestic Regulation," The Journal of Legal Studies, University of Chicago Press, vol. 40(1), pages 149-203.
    5. Ghodsi, Mahdi, 2020. "How do technical barriers to trade affect foreign direct investment? Tariff jumping versus regulation haven hypotheses," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 269-278.
    6. Ederington,Josh & Ruta,Michele, 2016. "Non-tariff measures and the world trading system," Policy Research Working Paper Series 7661, The World Bank.
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    More about this item

    Keywords

    Global value chains (GVC); Domestic value added (DVA); Tariffs; Non-tariff measures (NTM); Regulatory differences;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy

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