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Assessing the Price-Raising Effect of Non-Tariff Measures in Africa

Author

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  • Julien Gourdon

    (CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)

  • O. Cadot

Abstract

In spite of widespread tariff reductions, intra-African borders remain thick. Regional trade is inhibited by inadequate transportation infrastructure, but also by various government-imposed measures. This paper combines price data from the World Bank’s International Comparison Project (ICP) with the new TRAINS database on non-tariff measures (NTMs) to estimate their effect on consumer prices for selected consumption products. Results based on panel regressions on 1260 country-product pairs suggest that, after controlling for tariffs, systematic cross-country cost-of-living differences, and product-specific unobservables, SPS measures contribute to raise the price of African foodstuffs by 14%. At the product level, rice and other cereals, some types of meat (e.g. poultry), and edible oils tend to fetch high AVEs. Combining our estimates with data on household expenditure patterns from Kenya’s household survey, we show that the effect is regressive, raising the cost of living by 9% for poor households.
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Suggested Citation

  • Julien Gourdon & O. Cadot, 2014. "Assessing the Price-Raising Effect of Non-Tariff Measures in Africa," Post-Print hal-03410091, HAL.
    • Handle: RePEc:hal:journl:hal-03410091
    DOI: 10.1093/jae/eju007
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    2. Alan Asprilla & Nicolas Berman & Olivier Cadot & Mélise Jaud, 2019. "Trade Policy And Market Power: Firm‐Level Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(4), pages 1647-1673, November.
    3. 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..
    4. Ana Sanjuan Lopez & Marie-Luise Rau & Geert Woltjer, 2019. "Exploring alternative approaches to estimate the impact of non-tariff measures and further implementation in simulation models," JRC Research Reports JRC113883, Joint Research Centre.
    5. 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.
    6. 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.
    7. Brülhart, Marius, 2014. "More Than Copper: Towards The Diversification And Stabilization Of Zambian Exports," Papers 779, World Trade Institute.
    8. DeMaria Federica & Drogue Sophie & Lubello Pasquale, 2021. "The impact of pest risk management measures on trade: the case of apples from France and Chile," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 9(1), pages 1-16, December.
    9. World Bank, 2016. "Assessing the Impact of WTO Accession on Belarus," World Bank Publications - Reports 24698, The World Bank Group.
    10. 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.
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    12. Sithanonxay Suvannaphakdy & Hsiao Chink Tang & Alisa DiCaprio, 2016. "Assessing the trade impacts of the ASEAN + 6 FTA for Lao PDR," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 30(2), pages 72-89, November.
    13. World Bank, 2015. "Kazakhstan Trade Report," World Bank Publications - Reports 22046, The World Bank Group.
    14. Balistreri, Edward J. & Maliszewska, Maryla & Osorio-Rodarte, Israel & Tarr, David G. & Yonezawa, Hidemichi, 2016. "Poverty and Shared Prosperity Implications of Deep Integration in Eastern and Southern Africa," Conference papers 332681, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    15. Alia, Didier Y. & Zheng, Yuqing & Kusunose, Yoko & Reed, Michael R., 2017. "Trade effects of food regulations and standards: Assessing the impact of SPS measures on market structure," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258368, Agricultural and Applied Economics Association.
    16. 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).
    17. Edward J. Balistreri & Zoryana Olekseyuk & David G. Tarr, 2017. "Privatisation and the unusual case of Belarusian accession to the WTO," The World Economy, Wiley Blackwell, vol. 40(12), pages 2564-2591, December.
    18. Balistreri, Edward J. & Tarr, David G., 2020. "Comparison of deep integration in the Melitz, Krugman and Armington models: The case of The Philippines in RCEP," Economic Modelling, Elsevier, vol. 85(C), pages 255-271.
    19. Nicolas Berman & Alan Asprilla & Olivier Cadot & Mélise Jaud, 2015. "Pricing-to-market, Trade Policy, and Market Power," IHEID Working Papers 04-2015, Economics Section, The Graduate Institute of International Studies.
    20. Bernard Hoekman & Dominique Njinkeu, 2017. "Integrating Africa: Some Trade Policy Research Priorities and Challenges," RSCAS Working Papers 2017/43, European University Institute.

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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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