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Beyond tariff evasion: bypass effect of FTAs to circumvent technical barriers

Author

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  • Yanyun Li

    (Hefei University of Technology)

  • Faqin Lin

    (China Agricultural University)

Abstract

Can free trade agreements (FTAs) evade technical barriers to trade (TBT)? Based on the FTAs and TBT notification of the United States, this paper addresses this question using detailed product-level trade data of the period 2000–2017. It shows that, for the products covered by the US TBT notifications, Chinese exports to third countries that are part of the FTA trade bloc with the US are positively correlated to the imports by the US from the same countries. However, the authors do not find a bypass effect of FTA in evading technical barriers as regards trade with several other countries. Furthermore, the bypass evidence is stronger for countries near China that have similar institutional qualities, better political relations with China, a larger Chinese population, an FTA, and commonality in language with China, and where the rerouting cost is low for Chinese exporters.

Suggested Citation

  • Yanyun Li & Faqin Lin, 2022. "Beyond tariff evasion: bypass effect of FTAs to circumvent technical barriers," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(4), pages 1085-1105, November.
    • Handle: RePEc:spr:weltar:v:158:y:2022:i:4:d:10.1007_s10290-022-00455-4
    DOI: 10.1007/s10290-022-00455-4
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    More about this item

    Keywords

    Free trade agreement; Bypass effect; Technical barriers to trade;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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