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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)


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.

Suggested Citation

  • Niven Winchester, 2008. "Is there a dirty little secret? Non-tariff barriers and the gains from trade," Working Papers 0801, University of Otago, Department of Economics, revised Jan 2008.
  • Handle: RePEc:otg:wpaper:0801

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    References listed on IDEAS

    1. Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc.
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    7. Arjan Lejour & Ruud de Mooij & Richard Nahuis, 2001. "EU enlargement: economic implications for countries and industries," CPB Document 11, CPB Netherlands Bureau for Economic Policy Analysis.
    8. G. Philippidis & A.I. Sanjuán, 2007. "An Examination of Morocco's Trade Options with the EU," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 16(2), pages 259-300, March.
    9. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
    10. Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526.
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    More about this item


    trade liberalisation; non-tariff barriers; computable general equilibrium modelling;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models


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