IDEAS home Printed from https://ideas.repec.org/p/unc/blupap/69.html
   My bibliography  Save this paper

Deep Regional Integration And Non-Tariff Measures: A Methodology For Data Analysis

Author

Listed:
  • Olivier Cadot
  • Alan Asprilla
  • Julien Gourdon
  • Ralph Peters
  • Christian Knebel

Abstract

In this paper we develop "tools" for policymakers to advance "deep" regional integration with respect to non-tariff measures (NTMs). First, we develop a regulatory distance indicator to measure the similarity of NTM policies across countries and sectors. A quantitative approach which makes use of official NTM data to compare regulatory patterns is complemented by case-study approaches for a more detailed analysis. Policymakers can use these tools to assess the status quo of NTM-related regional integration and to benchmark progress. Secondly, we employ a price-gap based technique to estimate the price increasing effect of NTMs. Worldwide averages of ad-valorem equivalents (AVEs) for all NTM types combined vary between 5 and 27 per cent across sectors; with the highest AVEs in the animal and vegetable sectors. SPS and TBT measures account for the bulk of these AVEs, especially in Europe. Other NTMs like quantitative restrictions remain relevant in Asia, Latin America and Africa, especially in food-related products and in some industrial sectors. We also look at the estimation residuals to trace back from AVEs to more concrete and specific cases. Where the actual traded price of a product is higher than predicted by the model, a more-than-average restrictiveness of specific NTMs or monopolistic/oligopolistic markets are likely explanations. This approach may help to "flag" suspicious cases, but then requires going into deeper "on the ground" facts to find explanations. Furthermore, we explore the question about who pays the price for trade costs arising from NTMs. We derive anecdotal evidence from a specific example where the importer and foreign exporter can pass on the higher price to the final consumer or downstream producer in a value chain. This implies a low motivation for the actual trading partners to reduce certain trade barriers. Lastly, we link AVEs to Kenyan household survey data on consumption patterns in order to evaluate welfare impacts. NTM-related costs increase the average cost of living by about 8 per cent. Furthermore, this impact is stronger for poorer people and weaker for richer people. This distributional effect is caused by the higher share of food items in the consumption basket of the poor.

Suggested Citation

  • Olivier Cadot & Alan Asprilla & Julien Gourdon & Ralph Peters & Christian Knebel, 2015. "Deep Regional Integration And Non-Tariff Measures: A Methodology For Data Analysis," UNCTAD Blue Series Papers 69, United Nations Conference on Trade and Development.
    • Handle: RePEc:unc:blupap:69
    as

    Download full text from publisher

    File URL: https://unctad.org/system/files/official-document/itcdtab71_en.pdf?Repec
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hiau LooiKee & Alessandro Nicita & Marcelo Olarreaga, 2009. "Estimating Trade Restrictiveness Indices," Economic Journal, Royal Economic Society, vol. 119(534), pages 172-199, January.
    2. Maggie Xiaoyang Chen & Aaditya Mattoo, 2008. "Regionalism in standards: good or bad for trade?," Canadian Journal of Economics, Canadian Economics Association, vol. 41(3), pages 838-863, August.
    3. Auer, Raphael A. & Schoenle, Raphael S., 2016. "Market structure and exchange rate pass-through," Journal of International Economics, Elsevier, vol. 98(C), pages 60-77.
    4. Olivier Cadot & Julien Gourdon, 2014. "Editor's choice Assessing the Price-Raising Effect of Non-Tariff Measures in Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 23(4), pages 425-463.
    5. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-160, February.
    6. repec:cii:cepiei:2011-q4-128-5 is not listed on IDEAS
    7. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    8. John Christopher Beghin & Anne-Célia Disdier & Stéphan Marette, 2017. "Trade restrictiveness indices in the presence of externalities: An application to non-tariff measures," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 5, pages 81-104, World Scientific Publishing Co. Pte. Ltd..
    9. Alberto AMURGO PACHECO, 2006. "Mutual Recognition Agreements and Trade Diversion: Consequences for Developing Nations," IHEID Working Papers 20-2006, Economics Section, The Graduate Institute of International Studies, revised Jun 2007.
    10. Giovanni Maggi & Pinelopi Koujianou Goldberg, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, vol. 89(5), pages 1135-1155, December.
    11. Antoine Berthou & Charlotte Emlinger, 2011. "The Trade Unit Values database," International Economics, CEPII research center, issue 128, pages 97-117.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jaime de Melo & Alessandro Nicita, 2018. "Non-Tariff Measures: Data and Quantitative Tools of Analysis," Post-Print hal-01731305, HAL.
    2. Masoud Ali Khalid & Narmen M. Ghafor, 2019. "The Impact of NTMs on Trade: Evidence from Developing Countries," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 8(1), pages 37-47, January.
    3. Lukman OYELAMI & Amara ZONGO, 2022. "Modeling the Impact of Non-Tariff Barriers in Services on Intra-African Trade: Global Trade Analysis Project Model," Bordeaux Economics Working Papers 2022-08, Bordeaux School of Economics (BSE).
    4. Webb, Mike & Strutt, Anna & Rae, Allan, 2015. "Towards the Modelling of Changes in New Zealand’s Sanitary and Phytosanitary Measures," Conference papers 332656, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. John C. Beghin & Bo Xiong, 2016. "Economic Effects of Standard-Like Nontariff Measures: Analytical and Methodological Dimensions," Center for Agricultural and Rural Development (CARD) Publications 16-wp569, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    6. Sung Ju Cho & Saera Oh & Sang Hyeon Lee, 2020. "The Impact of Structure Similarity of Nontariff Measures on Agricultural Trade," Sustainability, MDPI, vol. 12(24), pages 1-13, December.
    7. Nabeshima, Kaoru & Obashi, Ayako, 2021. "Impact of Regulatory Burdens on International Trade," Journal of the Japanese and International Economies, Elsevier, vol. 59(C).
    8. Kere, Safilidin & Zongo, Amara, 2023. "Digital technologies and intra-African trade," International Economics, Elsevier, vol. 173(C), pages 359-383.
    9. Bossoma Doriane N’DOUA, 2022. "The Impact of Technical Barriers to Trade and Sanitary and Phytosanitary Measures on Trade in the Forest-Wood-Paper Sector," Bordeaux Economics Working Papers 2022-01, Bordeaux School of Economics (BSE).
    10. Yang, Qizhong, 2024. "Heterogeneous impact of non-tariff measures on import margins through global value chains: Firm-level evidence from China," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 533-562.
    11. Mike Webb & Anna Strutt & John Gibson & Terrie Walmsley, 2020. "Modelling the impact of non‐tariff measures on supply chains in ASEAN," The World Economy, Wiley Blackwell, vol. 43(8), pages 2172-2198, August.
    12. Nabeshima, Kaoru & Obashi, Ayako & Kim, Kunhyui, 2021. "Impacts of additional compliance requirements of regulations on the margins of trade," Japan and the World Economy, Elsevier, vol. 59(C).
    13. Webb, Mike & Strutt, Anna & Walmsley, Terrie, 2019. "Regulatory harmonization in the ASEAN region: The effects of applying different types of non-tariff measures," Conference papers 333045, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    14. Arita, Shawn & Beckman, Jayson & Mitchell, Lorraine, 2017. "Reducing transatlantic barriers on U.S.-EU agri-food trade: What are the possible gains?," Food Policy, Elsevier, vol. 68(C), pages 233-247.
    15. Rashmi BANGA, 2018. "Critique of impact assessment of regional trade agreements using non-tariff measures," Journal of Economics Bibliography, KSP Journals, vol. 5(1), pages 36-40, March.
    16. Banda, Chikumbutso & Kalaba, Mmatlou, 2021. "The Effects of Asymmetric Regulatory Measures on North-South Trade: A Case of South African Beef Exports to the European Union," 2021 Conference, August 17-31, 2021, Virtual 315849, International Association of Agricultural Economists.
    17. Leudjou, Roland, 2021. "Assessing the impacts of eliminating Non-Tariff Barriers in the framework of the African Continental Free Trade Area on Cameroons economy," Conference papers 330231, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. Stender, Frederik & Vogel, Tim, 2021. "Murky trade waters: Regional tariff commitments and non-tariff measures in Africa," IDOS Discussion Papers 13/2021, German Institute of Development and Sustainability (IDOS).
    19. Dalheimer, Bernhard & Brümmer, Bernhard & Jaghdani, Tinoush Jamali, 2017. "Impacts of Export Restrictions on Food Price Volatility: Evidence from VAR-X and EGARCH-X Models," 57th Annual Conference, Weihenstephan, Germany, September 13-15, 2017 262151, German Association of Agricultural Economists (GEWISOLA).
    20. John C. Beghin & Bo Xiong, 2016. "Economic Effects of Standard-Like Nontariff Measures: Analytical and Methodological Dimensions," Center for Agricultural and Rural Development (CARD) Publications 16-wp569, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    21. David Vanzetti & Ralph Peters & Christian Knebel, 2017. "Non-Tariff Measures: Lifting CFTA and ACP Trade to the Next Level," UNCTAD Blue Series Papers 78, United Nations Conference on Trade and Development.
    22. Grant, Jason & Arita, Shawn, 2017. "Sanitary and Phyto-Sanitary Measures: Assessment, Measurement, and Impact," Commissioned Papers 259417, International Agricultural Trade Research Consortium.
    23. Bossoma Doriane N'Doua, 2022. "The Impact of Technical Barriers to Trade and Sanitary and Phytosanitary Measures on Trade in the Forest-Wood-Paper Sector," Working Papers hal-03573168, HAL.
    24. Krisna Gupta, 2021. "The heterogeneous impact of tariff and non-tariff measures on total factor productivity on Indonesia firms," Departmental Working Papers 2021-21, The Australian National University, Arndt-Corden Department of Economics.
    25. Payam Elhami & Mahdi Ghodsi & Robert Stehrer, 2021. "Quality of Goods Imports: Which Role for Non-tariff Measures?," wiiw Policy Notes 46, The Vienna Institute for International Economic Studies, wiiw.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Olivier Cadot & Julien Gourdon, 2016. "Non-tariff measures, preferential trade agreements, and prices: new evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 227-249, May.
    2. Olper, Alessandro, 2017. "The political economy of trade-related regulatory policy: environment and global value chain," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(3), February.
    3. Olivier Cadot & Julien Gourdon, 2016. "Non-tariff measures, preferential trade agreements, and prices: new evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 227-249, May.
    4. Kruse, Hendrik W. & Martínez-Zarzoso, Inma & Baghdadi, Leila, 2021. "Standards and political connections: Evidence from Tunisia," Journal of Development Economics, Elsevier, vol. 153(C).
    5. Belloc, Marianna, 2015. "Information for sale in the European Union," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 130-144.
    6. Bown, Chad P., 2014. "Trade policy instruments over time," Policy Research Working Paper Series 6757, The World Bank.
    7. Ruckteschler, Christian & Malik, Adeel & Eibl, Ferdinand, 2022. "Politics of trade protection in an autocracy: Evidence from an EU tariff liberalization in Morocco," European Journal of Political Economy, Elsevier, vol. 71(C).
    8. Alexander, Patrick D. & Keay, Ian, 2019. "Responding to the First Era of Globalization: Canadian Trade Policy, 1870–1913," The Journal of Economic History, Cambridge University Press, vol. 79(3), pages 826-861, September.
    9. Tovar, Patricia, 2011. "Lobbying costs and trade policy," Journal of International Economics, Elsevier, vol. 83(2), pages 126-136, March.
    10. Bajzik, Josef & Havranek, Tomas & Irsova, Zuzana & Schwarz, Jiri, 2020. "Estimating the Armington elasticity: The importance of study design and publication bias," Journal of International Economics, Elsevier, vol. 127(C).
    11. Christian Ruckteschler & Adeel Malik & Ferdinand Eib, 2019. "The Politics of Trade Protection: Evidence from an EU-mandated Tari Liberalization in Morocco," CSAE Working Paper Series 2019-12, Centre for the Study of African Economies, University of Oxford.
    12. Bin, Sheng, 2000. "The Political Economy of Trade Policy in China," Working Papers 10/2000, Copenhagen Business School, Department of Management, Politics & Philosophy.
    13. Francois, Joseph & Nelson, Douglas & Pelkmans-Balaoing, Annette, 2008. "Endogenous Protection in General Equilibrium: Estimating Political Weights in the EU," CEPR Discussion Papers 6979, C.E.P.R. Discussion Papers.
    14. Gordon H. Hanson & Antonio Spilimbergo, 2001. "Political economy, sectoral shocks, and border enforcement," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 34(3), pages 612-638, August.
    15. Giovanni Facchini & Johannes Van Biesebroeck & Gerald Willmann, 2006. "Protection for sale with imperfect rent capturing," Canadian Journal of Economics, Canadian Economics Association, vol. 39(3), pages 845-873, August.
    16. Zissimos, Ben, 2009. "Optimum tariffs and retaliation: How country numbers matter," Journal of International Economics, Elsevier, vol. 78(2), pages 276-286, July.
    17. Richard E. Baldwin & Frédéric Robert-Nicoud, 2007. "Entry and Asymmetric Lobbying: Why Governments Pick Losers," Journal of the European Economic Association, MIT Press, vol. 5(5), pages 1064-1093, September.
    18. David J. Kuenzel, 2023. "Non‐tariff measures: What's tariffs got to do with it?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(1), pages 133-163, February.
    19. Giovanni Facchini & Marcelo Olarreaga & Peri Silva & Gerald Willmann, 2010. "Substitutability and Protectionism: Latin America's Trade Policy and Imports from China and India," The World Bank Economic Review, World Bank, vol. 24(3), pages 446-473, June.
    20. Richard Damania & Per G. Fredriksson & Thomas Osang, 2005. "Polluters and Collective Action: Theory and Evidence," Southern Economic Journal, John Wiley & Sons, vol. 72(1), pages 167-185, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unc:blupap:69. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marco Fugazza (email available below). General contact details of provider: https://edirc.repec.org/data/unctach.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.