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Is there a dirty little secret? Non-tariff barriers and the gains from trade

  • Niven Winchester

    ()

    (Department of Economics, University of Otago)

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    We estimate tariff equivalents (TEs) of non-tariff barriers (NTBs) using a series of gravity equations. Our analysis focuses on New Zealand, a nation that has a comprehensive free trade agreement (with Australia) that can be used to benchmark other trade negotiations. We estimate reductions in TEs following trade negotiations as differences between New Zealand-Australia TEs and those applying to trade between New Zealand and other nations. Simulating reductions in tariffs and NTBs in a computable general equilibrium (CGE) model indicates that gains from trade liberalisation are much larger when tariffs and NTBs are consider than when only tariffs are reduced.

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    File URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0801.pdf
    File Function: First version, 2008
    Download Restriction: no

    Paper provided by University of Otago, Department of Economics in its series Working Papers with number 0801.

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    Length: 38 pages
    Date of creation: Jan 2008
    Date of revision: Jan 2008
    Handle: RePEc:otg:wpaper:0801
    Contact details of provider: Postal: P.O. Box 56, Dunedin
    Phone: +64 3 479 8725
    Fax: 64 3 479 8171
    Web page: http://www.business.otago.ac.nz/econ
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    1. Robert Scollay & John P. Gilbert, 2001. "New Regional Trading Arrangements in the Asia Pacific?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa63.
    2. Joao Santos Silva & Silvana Tenreyro, 2005. "The log of gravity," LSE Research Online Documents on Economics 3744, London School of Economics and Political Science, LSE Library.
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    7. Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526.
    8. Philippidis, G. & Carrington, A., 2005. "European Enlargement and Single Market Accession: A Mistreated Issue," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 543-566.
    9. Michael Ferrantino, 2006. "Quantifying the Trade and Economic Effects of Non-Tariff Measures," OECD Trade Policy Papers 28, OECD Publishing.
    10. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June.
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