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Non-Tariff Barriers and Trade Liberalization

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  • Simon P. Anderson
  • Nicolas Schmitt

Abstract

This paper shows that governments have no incentive to introduce non-tariff barriers when they are free to set tariffs but they do when tariffs are determined cooperatively. We then show three results. First, with trade liberalization, there is a progression from u sing tariffs only to quotas, and to antidumping constraints (when quotas are jointly eliminated). Second, there is a narrowing of the range of industries in which each instrument is used. Third, the degree of tariff liberalization and of replacement of ta riffs by NTBs depend on industry characteristics. These results are roughly in line with the empirical evidence.

Suggested Citation

  • Simon P. Anderson & Nicolas Schmitt, 2000. "Non-Tariff Barriers and Trade Liberalization," CESifo Working Paper Series 254, CESifo.
    • Handle: RePEc:ces:ceswps:_254
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    Cited by:

    1. David J. Kuenzel, 2023. "Non‐tariff measures: What's tariffs got to do with it?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(1), pages 133-163, February.
    2. Volpe Martincus, Christian & Estevadeordal, Antoni, 2009. "Trade Policy and Specialization," IDB Publications (Working Papers) 2489, Inter-American Development Bank.
    3. Zhaohui Niu & Chris Milner & Saileshsingh Gunessee & Chang Liu, 2020. "Are nontariff measures and tariffs substitutes? Some panel data evidence," Review of International Economics, Wiley Blackwell, vol. 28(2), pages 408-428, May.
    4. Pascal Ghazalian & Ryan Cardwell, 2010. "Did the Uruguay Round Agreement on Agriculture Affect Trade Flows? An Empirical Investigation for Meat Commodities," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 16(4), pages 331-344, November.
    5. Garred, Jason, 2018. "The persistence of trade policy in China after WTO accession," Journal of International Economics, Elsevier, vol. 114(C), pages 130-142.
    6. Kuenzel, David J., 2020. "WTO tariff commitments and temporary protection: Complements or substitutes?," European Economic Review, Elsevier, vol. 121(C).
    7. Michael O. Moore & Maurizio Zanardi, 2011. "Trade Liberalization and Antidumping: Is There a Substitution Effect?," Review of Development Economics, Wiley Blackwell, vol. 15(4), pages 601-619, November.
    8. Imbruno, Michele, 2016. "China and WTO liberalization: Imports, tariffs and non-tariff barriers," China Economic Review, Elsevier, vol. 38(C), pages 222-237.
    9. Dinh Chuc,Nguyen & Hayakawa,Kazunobu, 2022. "The substitution effect of preferential tariffs on non-tariff measures: evidence from Vietnam," IDE Discussion Papers 865, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    10. repec:kap:iaecre:v:16:y:2010:i:4:p:331-344 is not listed on IDEAS
    11. Robert M. Feinberg & Kara M. Reynolds, 2007. "Tariff Liberalisation and Increased Administrative Protection: Is There a Quid Pro Quo?," The World Economy, Wiley Blackwell, vol. 30(6), pages 948-961, June.
    12. Melitz, Marc J., 2005. "When and how should infant industries be protected?," Journal of International Economics, Elsevier, vol. 66(1), pages 177-196, May.
    13. Zhe Chen & Zhongzhong Hu & Kai Li, 2021. "The spillover effect of trade policy along the value Chain: Evidence from China's rare earth‐related sectors," The World Economy, Wiley Blackwell, vol. 44(12), pages 3550-3582, December.
    14. Neha Bhardwaj Upadhayay, 2020. "Uncovering the proliferation of contingent protection through channels of retaliation, gender and development assistance," Erudite Ph.D Dissertations, Erudite, number ph20-02 edited by Julie Lochard & Catherine Bros, December.
    15. Byrne, Stephen & Rice, Jonathan, 2018. "Non-Tariff Barriers and Goods Trade: a Brexit Impact Analysis," Research Technical Papers 6/RT/18, Central Bank of Ireland.
    16. Tobias D. Ketterer, 2016. "EU Anti-dumping and Tariff Cuts: Trade Policy Substitution?," The World Economy, Wiley Blackwell, vol. 39(5), pages 576-596, May.
    17. Julia Gray & Jonathan Slapin, 2012. "How effective are preferential trade agreements? Ask the experts," The Review of International Organizations, Springer, vol. 7(3), pages 309-333, September.
    18. José Daniel Reyes, 2013. "Trade Liberalization and the Adoption of Antidumping Laws in Developing Countries," Revista Equidad y Desarrollo, Universidad de la Salle, December.
    19. Christian Volpe Martincus & Antoni Estevadeordal, 2009. "Trade Policy and Specialization," IDB Publications (Working Papers) 9289, Inter-American Development Bank.
    20. Vives, Xavier, 2005. "Games with strategic complementarities: New applications to industrial organization," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 625-637, September.

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    More about this item

    Keywords

    Tariffs; trade policy; reciprocal dumping; quotas; antidumping;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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