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Non-Tariff Barriers - the Achilles' Heel of Trade Policy Analyses

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    Abstract

    This study demonstrates the quantitative, as well as the qualitative, role of non-tariff barriers (NTBs). The Norwegian nominal tariff and non-tariff barriers are identified and thoroughly quantified. Computations of effective rates of protection (ERP) show that NTBs entirely dominate tariffs as direct contributors to primary factor income, which again is an important determinant in allocation of resources among industries. The indirect input-output effects play a decisive role. This points to the importance of estimating the nominal trade barrier inputs properly; when a biased estimate is spread throughout the input-output system, not even the direction of the miscalculation will be easy to predict. In order to demonstrate the qualitative role, NTBs are categorised into price-oriented and quantity-oriented, respectively. ERP computations illustrate that the conclusions of policy analyses rely critically on the qualitative interdependency between quantity-oriented NTBs and other measures.

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    File URL: http://www.ssb.no/a/publikasjoner/pdf/DP/dp195.pdf
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    Bibliographic Info

    Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 195.

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    Date of creation: Jun 1997
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    Handle: RePEc:ssb:dispap:195

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    Keywords: Non-tariff barriers; Trade policy; ERP computations.;

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    1. Vernon Roningen & Alexander Yeats, 1976. "Nontariff distortions of international trade: Some preliminary empirical evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 112(4), pages 613-625, December.
    2. Smith, Alasdair & Venables, Anthony J., 1988. "Completing the Internal Market in the European Community: Some Industry Simulations," CEPR Discussion Papers 233, C.E.P.R. Discussion Papers.
    3. Johnson, Harry G, 1969. "The Theory of Effective Protection and Preferences," Economica, London School of Economics and Political Science, vol. 36(142), pages 119-38, May.
    4. Deardoff, A.V. & Brown, D.K. & Stern, R.M. & Fox, A.K., 1995. "Computational Analysis of Goods and Services Liberalization in the Uruguay Round," Working Papers 379, Research Seminar in International Economics, University of Michigan.
    5. D. Greenaway & R. Hine, 1993. "Trade policy and protection in the European Community," Open Economies Review, Springer, vol. 4(4), pages 433-456, December.
    6. Roland-Holst, David W & Polo, Clemente & Sancho, Ferran, 1995. "Trade Liberalization and Industrial Structure in Spain: An Applied General Equilibrium Analysis," Empirical Economics, Springer, vol. 20(1), pages 1-18.
    7. Gabrielle Antille & Marc Bacchetta & Fabrizio Carlevaro & Tobias Müller & Nicolas Schmitt, 1993. "Switzerland and the European Economic Area: A General Equilibrium Assessment of Some Measures of Integration," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 129(IV), pages 643-672, December.
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