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Trade restrictiveness indices in the presence of externalities: An application to non-tariff measures

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  • John Christopher Beghin
  • Anne-Célia Disdier
  • Stéphan Marette

Abstract

We extend the trade restrictiveness index approach to the case of market imperfections and domestic regulations addressing them. We focus on standard-like non-tariff measures (NTMs) affecting cost of production and potentially enhancing demand by reducing negative externalities. We apply the framework to the database of Kee et al. ( ) and derive ad valorem equivalents (AVEs) for technical measures. About 39% of the product lines affected by NTMs exhibit negative AVEs, indicating a net trade-facilitating effect of these measures. Accounting for these effects significantly reduces previous measures of countries trade policy restrictiveness obtained while constraining these NTMs to be trade-reducing.

Suggested Citation

  • John Christopher Beghin & Anne-Célia Disdier & Stéphan Marette, 2015. "Trade restrictiveness indices in the presence of externalities: An application to non-tariff measures," Canadian Journal of Economics, Canadian Economics Association, vol. 48(4), pages 1513-1536, November.
  • Handle: RePEc:cje:issued:v:48:y:2015:i:4:p:1513-1536
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    Cited by:

    1. Bo Xiong & John Beghin, 2017. "Disentangling Demand-Enhancing And Trade-Cost Effects Of Maximum Residue Regulations," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 6, pages 105-108 World Scientific Publishing Co. Pte. Ltd..
    2. 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.
    3. Beverelli, Cosimo & Boffa, Mauro & Keck, Alexander, 2014. "Trade policy substitution: Theory and evidence from Specific Trade Concerns," WTO Staff Working Papers ERSD-2014-18, World Trade Organization (WTO), Economic Research and Statistics Division.
    4. Grant, Jason & Arita, Shawn, 2017. "Sanitary and Phyto-Sanitary Measures: Assessment, Measurement, and Impact," Commissioned Papers 259417, International Agricultural Trade Research Consortium.
    5. Maria Cipollina & David Laborde Debucquet & Luca Salvatici, 2017. "The tide that does not raise all boats: an assessment of EU preferential trade policies," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(1), pages 199-231, February.
    6. Mahdi Ghodsi & Julia Grübler & Oliver Reiter & Robert Stehrer, 2017. "The Evolution of Non-Tariff Measures and their Diverse Effects on Trade," wiiw Research Reports 419, The Vienna Institute for International Economic Studies, wiiw.
    7. Beghin, John C. & Bureau, Jean-Christophe & Gohin, Alex, 2014. "The Impact of an EU-US TTIP Agreement on Biofuel and Feedstock Markets," 2014: Food, Resources and Conflict, December 7-9, 2014. San Diego, California 197153, International Agricultural Trade Research Consortium.
    8. repec:ags:aieabj:276281 is not listed on IDEAS
    9. Disdier, Anne-Célia & Gaigné, Carl & Herghelegiu, Cristina, 2018. "Do Standards Improve the Quality of Traded Products?," CEPREMAP Working Papers (Docweb) 1808, CEPREMAP.
    10. Mahdi Ghodsi & Julia Grübler & Robert Stehrer, 2016. "Import Demand Elasticities Revisited," wiiw Working Papers 132, The Vienna Institute for International Economic Studies, wiiw.
    11. John C. Beghin & Jean-Christophe Bureau & Alexandre Gohin, 2017. "The Impact of an EU–US Transatlantic Trade and Investment Partnership Agreement on Biofuel and Feedstock Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(2), pages 321-344, June.
    12. repec:oup:erevae:v:44:y:2017:i:4:p:592-633. is not listed on IDEAS
    13. Giorgio Barba Navaretti & Giulia Felice & Emanuele Forlani & Paolo Garella, 2018. "Non-tariff measures and competitiveness," Development Working Papers 438, Centro Studi Luca d'Agliano, University of Milano, revised 12 Sep 2018.
    14. Julien Gooris & Cristina Mitaritonna, 2015. "Which import restrictions matter for trade in services ?," Working Papers 2015-33, CEPII research center.
    15. repec:bla:reviec:v:25:y:2017:i:5:p:1105-1129 is not listed on IDEAS
    16. 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.

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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