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Non-tariff measures, preferential trade agreements, and prices: new evidence

Author

Listed:
  • Olivier Cadot

    (University of Lausanne
    CEPR
    FERDI)

  • Julien Gourdon

    (CEPII)

Abstract

Combining for the first time a new dataset of non-tariff measures (NTMs) in 65 countries with the CEPII’s unit values database, we estimate average ad-valorem equivalents (AVEs) for sanitary and phytosanitary, technical-barriers-to trade and other measures by section of the Harmonized System of product classification. While most existing AVEs are obtained from indirect quantity-based estimation, ours are obtained from direct price-gap estimation. They lie in a single-digit range, i.e. substantially lower than previous estimates based on older data. Our results may reflect the progressive phasing out of command-and-control instruments such as quantitative restrictions in many countries; they also suggest that sanitary and technical regulations have not substituted for them as trade-restrictive interventions. Most interestingly, we show that deep-integration clauses in regional trade agreements, in particular the mutual recognition of conformity-assessment procedures, substantially reduce the price-raising effect of NTMs, possibly reflecting lower compliance costs.

Suggested Citation

  • 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.
  • Handle: RePEc:spr:weltar:v:152:y:2016:i:2:d:10.1007_s10290-015-0242-9
    DOI: 10.1007/s10290-015-0242-9
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    More about this item

    Keywords

    Non-tariff measures; Price gaps; Regional trade agreements; Deep integration; Harmonization; Unit values;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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