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Non-Tariff Trade Policy in the Context of Deep Trade Integration: An Ex-Post Gravity Model Application to the EU-South Korea Agreement

Author

Listed:
  • Grübler, Julia

    (Vienna Institute for International Economic Studies)

  • Reiter, Oliver

    (Vienna Institute for International Economic Studies)

Abstract

Many different approaches and databases have been developed for the evaluation of nontariff measures (NTMs) and free trade agreements (FTAs). This paper is devoted to the EUSouth Korea agreement, which is the first second-generation’FTA of the EU, addressing a wide array of non-tariff policies. We review the evolution of NTM types applicable to the EU-South Korea trade relationship and the role of NTMs in ex-ante and ex-post analyses of the agreement. Subsequently a structural gravity model is employed to assess the value added of information on different aspects of FTAs and types of NTMs by evaluating their ability to predict the trade effects of the EU-South Korea FTA. Our results show that, when accounting for information on the components common in modern deep trade agreements, no additional trade effect is attributable to the EU-South Korea FTA. The evolution of NTMs differs considerably across indicators used, but trade predictions are hardly affected. Most specifications point towards a negative effect of bilateral differences in the number of technical barriers to trade (TBT) applied and sanitary and phytosanitary measures (SPS) against which trading partners issued complaints at the WTO.

Suggested Citation

  • Grübler, Julia & Reiter, Oliver, 2021. "Non-Tariff Trade Policy in the Context of Deep Trade Integration: An Ex-Post Gravity Model Application to the EU-South Korea Agreement," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 25(1), pages 33-71, March.
    • Handle: RePEc:ris:eaerev:0390
    DOI: 10.11644/KIEP.EAER.2021.25.1.390
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    Citations

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    Cited by:

    1. Benjamin Jung, 2023. "The Trade Effects of the EU-South Korea Free Trade Agreement: Heterogeneity Across Time, Country Pairs, and Directions of Trade within Country Pairs," Open Economies Review, Springer, vol. 34(3), pages 617-656, July.
    2. Jung, Benjamin, 2022. "The Trade Effects of the EU-South Korea Free Trade Agreement: Heterogeneity across Time, Country Pairs, and Directions of Trade within Country Pairs," VfS Annual Conference 2022 (Basel): Big Data in Economics 264125, Verein für Socialpolitik / German Economic Association.
    3. Quintieri, Beniamino & Stamato, Giovanni, 2023. "Are preferential agreements beneficial to EU trade? New evidence from the EU-South Korea treaty," Working Paper Series 2822, European Central Bank.
    4. Oliver Reiter & Robert Stehrer, 2023. "Assessing the importance of risky products in international trade and global value chains," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(1), pages 7-33, February.
    5. Timo Walter, 2022. "Trade and welfare effects of a potential free trade agreement between Japan and the United States," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(4), pages 1199-1230, November.

    More about this item

    Keywords

    Trade Policy; Free Trade Agreement; EU; South Korea; Gravity Model;
    All these keywords.

    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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