IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_7419.html
   My bibliography  Save this paper

Trade Protection and the Role of Non-Tariff Barriers

Author

Listed:
  • Luisa Kinzius
  • Alexander-Nikolai Sandkamp
  • Erdal Yalcin

Abstract

A growing share of modern trade policy instruments is shaped by non-tariff barriers (NTBs). Based on a structural gravity equation and the recently updated Global Trade Alert database, we empirically investigate the effect of NTBs on imports. Our analysis reveals that the implementation of NTBs reduces imports of affected products by up to 12%. Their trade dampening effect is thus comparable to that of trade defence instruments such as anti-dumping duties. It is smaller for exporters that have a free trade agreement with the importing country. Different types of NTBs affect trade to a different extent. Finally, we investigate the effect of behind-the-border measures, showing that they significantly lower the importer’s market access.

Suggested Citation

  • Luisa Kinzius & Alexander-Nikolai Sandkamp & Erdal Yalcin, 2018. "Trade Protection and the Role of Non-Tariff Barriers," CESifo Working Paper Series 7419, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_7419
    as

    Download full text from publisher

    File URL: https://www.cesifo-group.de/DocDL/cesifo1_wp7419.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hiau LooiKee & Alessandro Nicita & Marcelo Olarreaga, 2009. "Estimating Trade Restrictiveness Indices," Economic Journal, Royal Economic Society, vol. 119(534), pages 172-199, January.
    2. Anderson, James E. & Yotov, Yoto V., 2016. "Terms of trade and global efficiency effects of free trade agreements, 1990–2002," Journal of International Economics, Elsevier, vol. 99(C), pages 279-298.
    3. Mario Larch & Joschka Wanner & Yoto V. Yotov & Thomas Zylkin, 2017. "The Currency Union Effect: A PPML Re-assessment with High-Dimensional Fixed Effects," CESifo Working Paper Series 6464, CESifo Group Munich.
    4. Scott Bradford, 2003. "Paying the Price: Final Goods Protection in OECD Countries," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 24-37, February.
    5. Head, Keith & Mayer, Thierry, 2014. "Gravity Equations: Workhorse,Toolkit, and Cookbook," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 131-195, Elsevier.
    6. Hiau Looi Kee & Cristina Neagu & Alessandro Nicita, 2013. "Is Protectionism on the Rise? Assessing National Trade Policies during the Crisis of 2008," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 342-346, March.
    7. 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.
    8. Chen, Natalie & Novy, Dennis, 2012. "On the measurement of trade costs: direct vs. indirect approaches to quantifying standards and technical regulations," World Trade Review, Cambridge University Press, vol. 11(3), pages 401-414, July.
    9. Benedikt Heid & Mario Larch & Yoto V. Yoto, 2017. "Estimating the Effects of Non-discriminatory Trade Policies within Structural Gravity Models," CESifo Working Paper Series 6735, CESifo Group Munich.
    10. Antoine Bouët & Yvan Decreux & Lionel Fontagné & Sébastien Jean & David Laborde, 2008. "Assessing Applied Protection across the World," Review of International Economics, Wiley Blackwell, vol. 16(5), pages 850-863, November.
    11. Egger, Peter H. & Nigai, Sergey, 2015. "Structural gravity with dummies only: Constrained ANOVA-type estimation of gravity models," Journal of International Economics, Elsevier, vol. 97(1), pages 86-99.
    12. Mario Larch & Joschka Wanner, 2014. "Carbon Tariffs: An Analysis of the Trade, Welfare and Emission Effects," CESifo Working Paper Series 4598, CESifo Group Munich.
    13. Fally, Thibault, 2015. "Structural gravity and fixed effects," Journal of International Economics, Elsevier, vol. 97(1), pages 76-85.
    14. Datt, Mohini & Hoekman, Bernard & Malouche, Mariem, 2011. "Taking Stock of Trade Protectionism Since 2008," World Bank - Economic Premise, The World Bank, issue 72, pages 1-9, December.
    15. Christian Henn & Brad McDonald, 2014. "Crisis Protectionism: The Observed Trade Impact," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 62(1), pages 77-118, April.
    16. Andriamananjara, Soamiely & Dean, Judith M. & Feinberg, Robert & Ferrantino, Michael J. & Ludema, Rodney & Tsigas, Marinos E., 2004. "The Effects of Non-Tariff Measures on Prices, Trade, and Welfare: CGE Implementation of Policy-Based Price Comparisons," Working Papers 15863, United States International Trade Commission, Office of Economics.
    17. Agnosteva, Delina E. & Anderson, James E. & Yotov, Yoto V., 2019. "Intra-national trade costs: Assaying regional frictions," European Economic Review, Elsevier, vol. 112(C), pages 32-50.
    18. Hoekman, Bernard & Nicita, Alessandro, 2011. "Trade Policy, Trade Costs, and Developing Country Trade," World Development, Elsevier, vol. 39(12), pages 2069-2079.
    19. Head, Keith & Ries, John, 2008. "FDI as an outcome of the market for corporate control: Theory and evidence," Journal of International Economics, Elsevier, vol. 74(1), pages 2-20, January.
    20. Beestermöller, Matthias & Disdier, Anne-Célia & Fontagné, Lionel, 2018. "Impact of European food safety border inspections on agri-food exports: Evidence from Chinese firms," China Economic Review, Elsevier, vol. 48(C), pages 66-82.
    21. Michael Bratt, 2017. "Estimating the bilateral impact of nontariff measures on trade," Review of International Economics, Wiley Blackwell, vol. 25(5), pages 1105-1129, November.
    22. Pramila Crivelli & Jasmin Groeschl, 2016. "The Impact of Sanitary and Phytosanitary Measures on Market Entry and Trade Flows," The World Economy, Wiley Blackwell, vol. 39(3), pages 444-473, March.
    23. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
    24. Georgios Georgiadis & Johannes Gräb, 2016. "Growth, Real Exchange Rates and Trade Protectionism since the Financial Crisis," Review of International Economics, Wiley Blackwell, vol. 24(5), pages 1050-1080, November.
    25. Peter Egger & Mario Larch & Kevin E. Staub & Rainer Winkelmann, 2010. "The Trade Effects of Endogenous Preferential Trade Agreements," CESifo Working Paper Series 3253, CESifo Group Munich.
    26. Peter Egger & Mario Larch & Kevin E. Staub & Rainer Winkelmann, 2011. "The Trade Effects of Endogenous Preferential Trade Agreements," American Economic Journal: Economic Policy, American Economic Association, vol. 3(3), pages 113-143, August.
    27. Michael J. Ferrantino, 2006. "Quantifying the Trade and Economic Effects of Non-Tariff Measures," OECD Trade Policy Papers 28, OECD Publishing.
    28. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
    29. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
    30. Gabriel Felbermayr & Feodora Teti & Erdal Yalcin & Gabriel J. Felbermayr, 2018. "On the Profitability of Trade Deflection and the Need for Rules of Origin," CESifo Working Paper Series 6929, CESifo Group Munich.
    31. Gabriel Felbermayr & Fukunari Kimura & Toshihiro Okubo & Marina Steininger & Erdal Yalcin, 2017. "On the economics of an EU-Japan Free Trade Agreement," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 86, April.
    32. Zhaohui Niu & Chang Liu & Saileshsingh Gunessee & Chris Milner, 2017. "Non-Tariff and Overall Protection: Evidence from Across Countries and Over Time," Discussion Papers 2017-08, University of Nottingham, GEP.
    33. Sergio Correia, 2016. "reghdfe: Estimating linear models with multi-way fixed effects," 2016 Stata Conference 24, Stata Users Group.
    34. Larch, Mario & Wanner, Joschka, 2017. "Carbon tariffs: An analysis of the trade, welfare, and emission effects," Journal of International Economics, Elsevier, vol. 109(C), pages 195-213.
    35. Robert C. Feenstra, 2015. "Advanced International Trade: Theory and Evidence Second Edition," Economics Books, Princeton University Press, edition 2, number 10615, March.
    36. Hofmann,Claudia & Osnago,Alberto & Ruta,Michele, 2017. "Horizontal depth : a new database on the content of preferential trade agreements," Policy Research Working Paper Series 7981, The World Bank.
    37. Egger, Peter H. & Tarlea, Filip, 2015. "Multi-way clustering estimation of standard errors in gravity models," Economics Letters, Elsevier, vol. 134(C), pages 144-147.
    38. Benedikt Heid & Mario Larch & Yoto V. Yoto, 2017. "Estimating the Effects of Non-discriminatory Trade Policies within Structural Gravity Models," CESifo Working Paper Series 6735, CESifo Group Munich.
    39. Matthias Beestermöller & Anne-Célia Disdier & Lionel Gérard Fontagné, 2016. "Impact of European Food Safety Border Inspections on Agri-Food Exports: Evidence from Chinese Firms," CESifo Working Paper Series 5840, CESifo Group Munich.
    40. Sergio Correia, 2014. "REGHDFE: Stata module to perform linear or instrumental-variable regression absorbing any number of high-dimensional fixed effects," Statistical Software Components S457874, Boston College Department of Economics, revised 18 Nov 2019.
    41. Ederington,Josh & Ruta,Michele, 2016. "Non-tariff measures and the world trading system," Policy Research Working Paper Series 7661, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Brunel, Claire & Zylkin, Thomas, 2019. "Do Cross-border Patents Promote Trade?," MPRA Paper 92514, University Library of Munich, Germany.

    More about this item

    Keywords

    non-tariff barriers; trade protection; gravity equation;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_7419. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe). General contact details of provider: http://edirc.repec.org/data/cesifde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.