Non-Tariff Barriers In Computable General Equilibrium Modelling
With diminishing tariff s, the focus of trade policy makers and analysts is logically turning towards non-tariff barriers (NTBs), but there much remains to be done. It is well-know that tackling NTBs poses many challenges for the analyst because of their diverse and complex nature, and the lack of available evidence. NTBs pose also particular diffi culties to computable/applied general equilibrium (CGE) modelling, traditionally more comfortable with policies whose impact can be interpreted into direct effects on prices. This research provides a quantifi cation of the impact of NTBs at the global level. The model we use is signifi cantly larger than in previous studies, and to our knowledge, the fi rst truly global one. The main focus of this research, however, is to discuss and question the various treatments of NTBs in CGE models with a specifi c application of the Global Trade Analysis Project (GTAP) standard model, the workhorse of trade policy CGE analysis. We fi nd that serious estimation and modelling eff orts remain to be undertaken in order to make CGE modelling a useful policy tool to analyze NTBs. Casual policy inferences from loose specifi cations may indeed lead to serious analytical mistakes. We show that while using the same robust estimates of NTB incidence we obtain vastly diff erent results under diff erent model specifications.
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