IDEAS home Printed from https://ideas.repec.org/p/wes/weswpa/2025-001.html

Preferential Trade Agreements and Non-tariff Measures

Author

Listed:
  • David J. Kuenzel

    (Department of Economics, Wesleyan University)

  • Rishi R. Sharma

    (Department of Economics, Colgate University)

Abstract

We study the product-level effects of Preferential Trade Agreements (PTAs) on the implementation of non-tariff measures (NTMs) using a global database spanning the 2000-2017 period. Employing an instrumental variable strategy, we provide evidence that an increase in the import share of PTA partners leads to a reduction in the application of NTMs. Exploring several mechanisms, we find that these effects are driven by products with higher preferential margins, the gap between MFN and preferential tariff rates. This result is consistent with what we call a “rent preservation effect,” whereby PTA partner countries push to limit the imposition of NTMs in order to preserve their preferential rents. Importantly, higher PTA import shares contribute to multilateral liberalization by lowering both the usage of NTMs against PTA members and non-PTA partners.

Suggested Citation

  • David J. Kuenzel & Rishi R. Sharma, 2025. "Preferential Trade Agreements and Non-tariff Measures," Wesleyan Economics Working Papers 2025-001, Wesleyan University, Department of Economics.
    • Handle: RePEc:wes:weswpa:2025-001
    as

    Download full text from publisher

    File URL: http://repec.wesleyan.edu/pdf/dkuenzel/2025001_kuenzel.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Prusa, Thomas J. & Teh, Robert & Zhu, Min, 2022. "PTAs and the incidence of antidumping disputes," Journal of International Economics, Elsevier, vol. 138(C).
    2. Tabakis, Chrysostomos & Zanardi, Maurizio, 2019. "Preferential trade agreements and antidumping protection," Journal of International Economics, Elsevier, vol. 121(C).
    3. Weidner, Martin & Zylkin, Thomas, 2021. "Bias and consistency in three-way gravity models," Journal of International Economics, Elsevier, vol. 132(C).
    4. John Christopher Beghin & Anne-Célia Disdier & Stéphan Marette, 2017. "Trade restrictiveness indices in the presence of externalities: An application to non-tariff measures," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 5, pages 81-104, World Scientific Publishing Co. Pte. Ltd..
    5. Baybars Karacaovali & Nuno Limão, 2018. "The clash of liberalizations: Preferential vs. multilateral trade liberalization in the European Union," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 14, pages 373-401, World Scientific Publishing Co. Pte. Ltd..
    6. Egger, Peter & Larch, Mario, 2008. "Interdependent preferential trade agreement memberships: An empirical analysis," Journal of International Economics, Elsevier, vol. 76(2), pages 384-399, December.
    7. Magdalene Silberberger & Frederik Stender, 2018. "False friends? Empirical evidence on trade policy substitution in regional trade agreements," The World Economy, Wiley Blackwell, vol. 41(8), pages 2175-2199, August.
    8. Nuno Limão, 2018. "Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the United States," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 13, pages 353-371, World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tovar, Patricia, 2019. "Preferential and multilateral liberalization: Evidence from Latin America’s use of tariffs, antidumping and safeguards," Journal of Development Economics, Elsevier, vol. 141(C).
    2. Kiran Ayub & Peri Silva, 2024. "Product differentiation, interdependence, and the formation of PTAs," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 160(3), pages 905-952, August.
    3. Kuenzel, David J. & Sharma, Rishi R., 2021. "Preferential trade agreements and MFN tariffs: Global evidence," European Economic Review, Elsevier, vol. 138(C).
    4. Atika Benaddi & Peri Silva, 2022. "The multilateral trade policy of the Arab league countries: An empirical investigation," The World Economy, Wiley Blackwell, vol. 45(11), pages 3420-3450, November.
    5. Baybars Karacaovali, 2016. "Trade-diverting free trade agreements, external tariffs, and feasibility," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(1), pages 1-22, February.
    6. Min Zhu & Thomas J. Prusa, 2023. "The impact of preferential trade agreements on the duration of antidumping protection," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(2), pages 553-592, May.
    7. Tabakis, Chrysostomos & Zanardi, Maurizio, 2019. "Preferential trade agreements and antidumping protection," Journal of International Economics, Elsevier, vol. 121(C).
    8. Marco Fugazza & Frédéric Robert-Nicoud, 2012. "The ‘Emulator Effect’ Of The Uruguay Round On United States Regionalism," UNCTAD Blue Series Papers 51, United Nations Conference on Trade and Development.
    9. Maggi, Giovanni, 2014. "International Trade Agreements," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 317-390, Elsevier.
    10. Nuno Limão, 2016. "Preferential Trade Agreements," NBER Working Papers 22138, National Bureau of Economic Research, Inc.
    11. Ross Jestrab, 2024. "Importer market power and preferential trade agreements: Empirical evidence," Review of International Economics, Wiley Blackwell, vol. 32(3), pages 993-1038, August.
    12. Marco Fugazza & Frédéric Robert-Nicoud, 2014. "The “Emulator Effect” of the Uruguay Round on US Regionalism," Review of International Economics, Wiley Blackwell, vol. 22(5), pages 1049-1078, November.
    13. Chuc Dinh Nguyen & Kazunobu Hayakawa, 2024. "The Substitution Effect of Preferential Tariffs on Nontariff Measures: Evidence from Vietnam," The Developing Economies, Institute of Developing Economies, vol. 62(1), pages 87-103, March.
    14. Harald Oberhofer & Zhenyi Wang, 2025. "Everything You Always Wanted to Know About EU Membership Trade Effects But Were Afraid to Ask," CESifo Working Paper Series 11823, CESifo.
    15. Kazunobu Hayakawa & Fukunari Kimura, 2015. "How Much Do Free Trade Agreements Reduce Impediments to Trade?," Open Economies Review, Springer, vol. 26(4), pages 711-729, September.
    16. Ketterer, Tobias D. & Bernhofen, Daniel & Milner, Chris, 2014. "Preferences, rent destruction and multilateral liberalization: The building block effect of CUSFTA," Journal of International Economics, Elsevier, vol. 92(1), pages 63-77.
    17. Calvo-Pardo, Hector & Freund, Caroline & Ornelas, Emanuel, 2009. "The ASEAN free trade agreement : impact on trade flows and external trade barriers," Policy Research Working Paper Series 4960, The World Bank.
    18. Ornelas, Emanuel & Tovar, Patricia, 2022. "Intra-bloc tariffs and preferential margins in trade agreements," Journal of International Economics, Elsevier, vol. 138(C).
    19. Peter Drahos & Christian Downie, 2017. "Regulatory Unilateralism: Arguments for Going It Alone on Climate Change," Global Policy, London School of Economics and Political Science, vol. 8(1), pages 32-40, February.
    20. Tobias D. Ketterer, 2015. "EU Regionalism and External Tariff Protection: The Role of Initial Tariffs and the Heterogeneity of Preferential Market Access," Discussion Papers 2015-03, University of Nottingham, GEP.

    More about this item

    Keywords

    ;
    ;

    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:wes:weswpa:2025-001. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Manolis Kaparakis (email available below). General contact details of provider: https://edirc.repec.org/data/edwesus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.