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Are nontariff measures and tariffs substitutes? Some panel data evidence

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  • Zhaohui Niu
  • Chris Milner
  • Saileshsingh Gunessee
  • Chang Liu

Abstract

Using new estimates of ad valorem equivalent of nontariff measures (NTMs) over time, this paper examines NTMs and tariffs’ relationship for a sample of 70 economies for 4,949 products at the 6‐digit harmonized system level over the period 2003–2015. A panel data methodology models the lagged adjustment of NTMs to tariffs, consistent with a causal relationship. Trade policy substitution is found when the models are estimated in both levels and changes; with this holding for both OECD and non‐OECD countries, but not for the agriculture sector in OECD countries. Overall, there is a fairly complete substitution between policy instruments in absolute terms.

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  • 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.
    • Handle: RePEc:bla:reviec:v:28:y:2020:i:2:p:408-428
    DOI: 10.1111/roie.12457
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    2. Gründler, Klaus & Hillman, Arye L., 2021. "Ambiguous protection," European Journal of Political Economy, Elsevier, vol. 68(C).
    3. Giovanni Maggi & Monika Mrázová & J. Peter Neary, 2022. "Choked By Red Tape? The Political Economy Of Wasteful Trade Barriers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(1), pages 161-188, February.
    4. Rabah Arezki & Ana Margarida Fernandes & Federico Merchán & Ha Nguyen & Tristan Reed, 2021. "Natural Resource Dependence and Monopolized Imports," CESifo Working Paper Series 9254, CESifo.
    5. Timini, Jacopo, 2023. "Revisiting the ‘Cobden-Chevalier network’ trade and welfare effects," Explorations in Economic History, Elsevier, vol. 89(C).
    6. Chuc Dinh Nguyen & Kazunobu Hayakawa, 2024. "The Substitution Effect of Preferential Tariffs on Nontariff Measures: Evidence from Vietnam," The Developing Economies, Institute of Developing Economies, vol. 62(1), pages 87-103, March.
    7. Inae Heo & Bo‐Young Choi, 2023. "The global financial crisis and protectionism: Substitution from tariffs to non‐tariff measures," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 880-894, October.
    8. Zhaohui Niu & Saileshsingh Gunessee & Chris Milner, 2022. "Import competition and quality upgrading revisited: the role of overall protection," Empirical Economics, Springer, vol. 63(3), pages 1219-1246, September.
    9. 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.
    10. 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).
    11. Dela‐Dem Doe Fiankor & Oliver‐Ken Haase & Bernhard Brümmer, 2021. "The Heterogeneous Effects of Standards on Agricultural Trade Flows," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(1), pages 25-46, February.
    12. Hayakawa, Kazunobu & Jongwanich, Juthathip & Kohpaiboon, Archanun, 2022. "The trade effect of non-tariff measures in a high-quality trade agreement," IDE Discussion Papers 871, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    13. Garcés Iriarte, Irene & Vogt, Achim, 2024. "Global value chain integration and non-tariff measures," Papers 1432, World Trade Institute.
    14. Kazunobu Hayakawa, 2023. "Multiple preference regimes and rules of origin," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 159(3), pages 673-696, August.
    15. Youngmin BAEK & HAYAKAWA Kazunobu, 2022. "Fixed Costs in Exporting and Investing," Discussion papers 22023, Research Institute of Economy, Trade and Industry (RIETI).

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