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Is there a dirty little secret? Non-tariff barriers and the gains from trade

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  • Winchester, Niven

Abstract

We estimate tariff equivalents (TEs) of non-tariff barriers (NTBs) using a series of gravity equations. Our analysis focuses on New Zealand, a nation that has a comprehensive free trade agreement (with Australia) that can be used to benchmark other trade negotiations. We estimate reductions in TEs following trade negotiations as differences between New Zealand-Australia TEs and those applying to trade between New Zealand and other nations. Simulating reductions in tariffs and NTBs in a computable general equilibrium (CGE) model indicates that gains from trade liberalisation are much larger when tariffs and NTBs are considered than when only tariffs are reduced. Our results have several implications for trade policy.

Suggested Citation

  • Winchester, Niven, 2009. "Is there a dirty little secret? Non-tariff barriers and the gains from trade," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 819-834, November.
    • Handle: RePEc:eee:jpolmo:v:31:y:2009:i:6:p:819-834
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    More about this item

    Keywords

    Trade liberalisation Non-tariff barriers Computable general equilibrium modelling;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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