Assessing the Impact of Non-Tariffs Barriers during the Global Crisis: The Experience of Argentina, Ecuador and Venezuela

The recent Global Financial Crisis resulted in governments initiating special measures to protect the competitiveness of their domestic industries. This research paper assesses the adoption of non-tariff barriers including antidumping, quotas, guaranteed minimum prices and the granting of special licenses; whose overall impact is difficult to assess because of the nature of such measures. In this scenario, we propose a methodology to assess the impact of these policies, by the generation of a tariff-like proxy used to shock the normal reported tariff rates. This methodology is constructed directly from data on affected tariff lines, imports, and variations on price and quantity during the crisis. This information is included in the GTAP version 7 to quantify, through the GTAP model, the effects of different macroeconomic variables such as exports, imports and GDP. The quantification comes from the variation between the base scenario and the new scenario, which includes the real tariff proxy. The cases of Argentina, Ecuador and The Bolivarian Republic of Venezuela are particularly interesting as these economies imposed the largest number of NTBs in all Latin America and the Caribbean throughout the crisis period. The results shed light over the real impact that these measures have had in relation to what is theoretically expected. The study concludes with recommendations for policy makers of countries seeking protection from the economic crisis. Other alternatives are considered for implementation thereby reducing the noise over other key macroeconomic variables, especially regarding intraregional trade.