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Deep Regional Integration And Non-Tariff Measures: A Methodology For Data Analysis

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  • Olivier Cadot
  • Alan Asprilla
  • Julien Gourdon
  • Ralph Peters
  • Christian Knebel

Abstract

In this paper we develop "tools" for policymakers to advance "deep" regional integration with respect to non-tariff measures (NTMs). First, we develop a regulatory distance indicator to measure the similarity of NTM policies across countries and sectors. A quantitative approach which makes use of official NTM data to compare regulatory patterns is complemented by case-study approaches for a more detailed analysis. Policymakers can use these tools to assess the status quo of NTM-related regional integration and to benchmark progress. Secondly, we employ a price-gap based technique to estimate the price increasing effect of NTMs. Worldwide averages of ad-valorem equivalents (AVEs) for all NTM types combined vary between 5 and 27 per cent across sectors; with the highest AVEs in the animal and vegetable sectors. SPS and TBT measures account for the bulk of these AVEs, especially in Europe. Other NTMs like quantitative restrictions remain relevant in Asia, Latin America and Africa, especially in food-related products and in some industrial sectors. We also look at the estimation residuals to trace back from AVEs to more concrete and specific cases. Where the actual traded price of a product is higher than predicted by the model, a more-than-average restrictiveness of specific NTMs or monopolistic/oligopolistic markets are likely explanations. This approach may help to "flag" suspicious cases, but then requires going into deeper "on the ground" facts to find explanations. Furthermore, we explore the question about who pays the price for trade costs arising from NTMs. We derive anecdotal evidence from a specific example where the importer and foreign exporter can pass on the higher price to the final consumer or downstream producer in a value chain. This implies a low motivation for the actual trading partners to reduce certain trade barriers. Lastly, we link AVEs to Kenyan household survey data on consumption patterns in order to evaluate welfare impacts. NTM-related costs increase the average cost of living by about 8 per cent. Furthermore, this impact is stronger for poorer people and weaker for richer people. This distributional effect is caused by the higher share of food items in the consumption basket of the poor.

Suggested Citation

  • Olivier Cadot & Alan Asprilla & Julien Gourdon & Ralph Peters & Christian Knebel, 2015. "Deep Regional Integration And Non-Tariff Measures: A Methodology For Data Analysis," UNCTAD Blue Series Papers 69, United Nations Conference on Trade and Development.
  • Handle: RePEc:unc:blupap:69
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    References listed on IDEAS

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    Cited by:

    1. Jaime de Melo & Alessandro Nicita, 2018. "Non-Tariff Measures: Data and Quantitative Tools of Analysis," Post-Print hal-01731305, HAL.
    2. Masoud Ali Khalid & Narmen M. Ghafor, 2019. "The Impact of NTMs on Trade: Evidence from Developing Countries," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 8(1), pages 37-47, January.
    3. Lukman OYELAMI & Amara ZONGO, 2022. "Modeling the Impact of Non-Tariff Barriers in Services on Intra-African Trade: Global Trade Analysis Project Model," Bordeaux Economics Working Papers 2022-08, Bordeaux School of Economics (BSE).
    4. Webb, Mike & Strutt, Anna & Rae, Allan, 2015. "Towards the Modelling of Changes in New Zealand’s Sanitary and Phytosanitary Measures," Conference papers 332656, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. John C. Beghin & Bo Xiong, 2016. "Economic Effects of Standard-Like Nontariff Measures: Analytical and Methodological Dimensions," Center for Agricultural and Rural Development (CARD) Publications 16-wp569, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    6. Sung Ju Cho & Saera Oh & Sang Hyeon Lee, 2020. "The Impact of Structure Similarity of Nontariff Measures on Agricultural Trade," Sustainability, MDPI, vol. 12(24), pages 1-13, December.
    7. Nabeshima, Kaoru & Obashi, Ayako, 2021. "Impact of Regulatory Burdens on International Trade," Journal of the Japanese and International Economies, Elsevier, vol. 59(C).
    8. Kere, Safilidin & Zongo, Amara, 2023. "Digital technologies and intra-African trade," International Economics, Elsevier, vol. 173(C), pages 359-383.
    9. Bossoma Doriane N’DOUA, 2022. "The Impact of Technical Barriers to Trade and Sanitary and Phytosanitary Measures on Trade in the Forest-Wood-Paper Sector," Bordeaux Economics Working Papers 2022-01, Bordeaux School of Economics (BSE).
    10. Mike Webb & Anna Strutt & John Gibson & Terrie Walmsley, 2020. "Modelling the impact of non‐tariff measures on supply chains in ASEAN," The World Economy, Wiley Blackwell, vol. 43(8), pages 2172-2198, August.
    11. Nabeshima, Kaoru & Obashi, Ayako & Kim, Kunhyui, 2021. "Impacts of additional compliance requirements of regulations on the margins of trade," Japan and the World Economy, Elsevier, vol. 59(C).
    12. Webb, Mike & Strutt, Anna & Walmsley, Terrie, 2019. "Regulatory harmonization in the ASEAN region: The effects of applying different types of non-tariff measures," Conference papers 333045, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    13. Arita, Shawn & Beckman, Jayson & Mitchell, Lorraine, 2017. "Reducing transatlantic barriers on U.S.-EU agri-food trade: What are the possible gains?," Food Policy, Elsevier, vol. 68(C), pages 233-247.
    14. Rashmi BANGA, 2018. "Critique of impact assessment of regional trade agreements using non-tariff measures," Journal of Economics Bibliography, KSP Journals, vol. 5(1), pages 36-40, March.
    15. Banda, Chikumbutso & Kalaba, Mmatlou, 2021. "The Effects of Asymmetric Regulatory Measures on North-South Trade: A Case of South African Beef Exports to the European Union," 2021 Conference, August 17-31, 2021, Virtual 315849, International Association of Agricultural Economists.
    16. 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.
    17. 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).
    18. Dalheimer, Bernhard & Brümmer, Bernhard & Jaghdani, Tinoush Jamali, 2017. "Impacts of Export Restrictions on Food Price Volatility: Evidence from VAR-X and EGARCH-X Models," 57th Annual Conference, Weihenstephan, Germany, September 13-15, 2017 262151, German Association of Agricultural Economists (GEWISOLA).
    19. John C. Beghin & Bo Xiong, 2016. "Economic Effects of Standard-Like Nontariff Measures: Analytical and Methodological Dimensions," Center for Agricultural and Rural Development (CARD) Publications 16-wp569, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    20. David Vanzetti & Ralph Peters & Christian Knebel, 2017. "Non-Tariff Measures: Lifting CFTA and ACP Trade to the Next Level," UNCTAD Blue Series Papers 78, United Nations Conference on Trade and Development.
    21. Grant, Jason & Arita, Shawn, 2017. "Sanitary and Phyto-Sanitary Measures: Assessment, Measurement, and Impact," Commissioned Papers 259417, International Agricultural Trade Research Consortium.
    22. Bossoma Doriane N'Doua, 2022. "The Impact of Technical Barriers to Trade and Sanitary and Phytosanitary Measures on Trade in the Forest-Wood-Paper Sector," Working Papers hal-03573168, HAL.
    23. Krisna Gupta, 2021. "The heterogeneous impact of tariff and non-tariff measures on total factor productivity on Indonesia firms," Departmental Working Papers 2021-21, The Australian National University, Arndt-Corden Department of Economics.
    24. Payam Elhami & Mahdi Ghodsi & Robert Stehrer, 2021. "Quality of Goods Imports: Which Role for Non-tariff Measures?," wiiw Policy Notes 46, The Vienna Institute for International Economic Studies, wiiw.

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