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Measuring the Effects and Evolution of Non-tariff Measures

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  • Yuting Gao

    (Indiana University, Department of Economics)

Abstract

How do Non-tariff Measures (NTMs) affect trade flows, and how do these effects evolve over time? I estimate and compare the trade effects for 6 types of NTMs over 15 years. I construct a dataset of import flows and trade policies for 110 countries and 96 HS2 level products. I use poisson pseudo-maximum likelihood to estimate structural gravity model during 2000-2015. The main results are that when measured by ad valorem equivalents, both implementation effects and marginal effects of NTMs converge to 0 over time. On the one hand, this pattern is good for countries seeking to impose more NTMs out of non-protective purpose, because they will face less distortions brought by the NTMs on import flows. On the other hand, this pattern hurts the countries seeking to impose more protective measures, because the NTMs are losing the power to effectively restrict imports.

Suggested Citation

  • Yuting Gao, 2022. "Measuring the Effects and Evolution of Non-tariff Measures," CAEPR Working Papers 2022-007 Classification-F, Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington.
    • Handle: RePEc:inu:caeprp:2022007
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    File URL: https://caepr.indiana.edu/RePEc/inu/caeprp/caepr2022-007.pdf
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    References listed on IDEAS

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    Keywords

    non-tariff measures; ad valorem equivalents; gravity model;
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