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Non-tariff barriers in CGE models: How useful for policy?

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  • Fugazza, Marco
  • Maur, Jean-Christophe

Abstract

With diminishing tariffs, the focus of trade policy makers and analysts is logically turning towards non-tariff barriers (NTBs), but there much remains to be done. It is well-know that tackling NTBs poses many challenges for the analyst because of their diverse and complex nature, and the lack of available evidence. NTBs pose also particular difficulties to computable/applied general equilibrium (CGE) modelling, traditionally more comfortable with policies whose impact can be interpreted into direct effects on prices. This research provides a quantification of the impact of NTBs at the global level. The model we use is significantly larger than in previous studies, and to our knowledge, the first truly global one. The main focus of this research, however, is to discuss and question the various treatments of NTBs in CGE models with a specific application of the global trade analysis project (GTAP) standard model, the workhorse of trade policy CGE analysis. We find that serious estimation and modelling efforts remain to be undertaken in order to make CGE modelling a useful policy tool to analyze NTBs. Casual policy inferences from loose specifications may indeed lead to serious analytical mistakes. We show that while using the same robust estimates of NTB incidence we obtain vastly different results under different model specifications.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Policy Modeling.

Volume (Year): 30 (2008)
Issue (Month): 3 ()
Pages: 475-490

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Handle: RePEc:eee:jpolmo:v:30:y:2008:i:3:p:475-490

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Web page: http://www.elsevier.com/locate/inca/505735

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References

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Citations

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Cited by:
  1. Wannaphong Durongkaveroj and Rossarin Osathanunkul & Rossarin Osathanunkul, 2013. "Regional multipliers of social accounting matrix and the effective eradication of poverty," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 2(4), pages 39 - 52, December.
  2. Kitwiwattanachai, Anyarath & Nelson, Doug & Reed, Geoffrey, 2010. "Quantitative impacts of alternative East Asia Free Trade Areas: A Computable General Equilibrium (CGE) assessment," Journal of Policy Modeling, Elsevier, vol. 32(2), pages 286-301, March.
  3. Pierre, Boulanger & Aikaterini, Kavallari & Luise, Rau Marie & Martine, Rutten, 2013. "Trade openness and investment in North Africa: A CGE application to deep and comprehensive free trade areas (DCFTAs) between the EU and respectively Egypt, Morocco and Tunisia," Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152360, International Agricultural Trade Research Consortium.
  4. Marco Fugazza, 2013. "The Economics Behind Non-Tariff Measures: Theoretical Insights And Empirical Evidence," UNCTAD Blue Series Papers 57, United Nations Conference on Trade and Development.
  5. Bo Xiong & John C. Beghin, 2013. "Disentangling Demand-Enhancing and Trade-Cost Effects of Maximum Residue Regulations," Center for Agricultural and Rural Development (CARD) Publications 13-wp544, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  6. Mohamed Ben Abdallah & Abdelkader Ait El Mekki & Gamal Siam, 2013. "Economic Growth in the Euro-Med Area through Trade Integration: Focus on Agriculture and Food. North Africa case studies - Egypt, Morocco, Tunisia," JRC-IPTS Working Papers JRC84801, Institute for Prospective and Technological Studies, Joint Research Centre.
  7. Matthias Bauer & Andreas Freytag, 2013. "Cumulative Benefits from Trade Liberalization for the South African Economy," Jena Economic Research Papers 2013-036, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  8. Engelbert, Tanja & Brockmeier, Martina, 2012. "Analyse Des Freihandelsabkommens Zwischen Der Eu Und Indien Unter Berücksichtigung Von Nicht-Tarifären Handelshemmnissen Im Agrar – Und Ernährungsbereich," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 133034, German Association of Agricultural Economists (GEWISOLA).
  9. Xiong, Bo & Beghin, John C., 2011. "Disentangling the Demand-enhancing Effect and Trade-cost Effect of Technical Measures in Agricultural Trade among OECD countries," Proceedings Issues, 2011: Agricultural Price Volatility, Trade Policy and Food Security in Developing Countries, December 2011, St. Petersburg, FL 116898, International Agricultural Trade Research Consortium.
  10. Li, Yuan & Beghin, John C., 2010. "A Meta-Analysis of Estimates of the Impact of Technical Barriers to Trade," Staff General Research Papers 31968, Iowa State University, Department of Economics.
  11. Sudip Ranjan Basu & Fabien Dumesnil, 2012. "Evolution Of Non-Tariff Measures: Emerging Cases From Selected Developing Countries," UNCTAD Blue Series Papers 52, United Nations Conference on Trade and Development.
  12. Conway, Patrick, 2009. "Trade liberalization in textiles: Policy effects in an import-competing industry," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 664-680, September.
  13. Flaig, Dorothee & Rubin, Ofir & Siddig, Khalid, 2013. "Imperfect competition, border protection and consumer boycott: The future of the dairy industry in Israel," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 838-851.
  14. Murat Genç & David Law, 2014. "A Gravity Model of Barriers to Trade in New Zealand," Treasury Working Paper Series 14/05, New Zealand Treasury.
  15. Aikaterini Kavallari & Marie-Luise Rau & Martine Rutten, 2013. "Economic Growth in the Euro-Med Area through Trade Integration: Focus on Agriculture and Food. Regional impact analysis," JRC-IPTS Working Papers JRC84800, Institute for Prospective and Technological Studies, Joint Research Centre.
  16. Rau, Mari-Luise & Aikaterini, Kavallari, 2013. "Preference Erosion Effects of Multilateral and Regional Trade Liberalisation: Simulating the EU's Trade Agreements with Mediterranean Countries," 135th Seminar, August 28-30, 2013, Belgrade, Serbia 160394, European Association of Agricultural Economists.

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