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

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  • Niven Winchester

    (Department of Economics, University of Otago)

Abstract

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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    File URL: http://www.otago.ac.nz/economics/research/otago077106.pdf
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    More about this item

    Keywords

    trade liberalisation; non-tariff barriers; computable general equilibrium modelling;
    All these keywords.

    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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