Study Of Average Effects Of Non-Tariff Measures On Trade Imports

Newly collected data in UNCTAD’s Trade Analysis and Information System (TRAINS) database on non-tariff measures (NTMs) offers the possibility to assess its impact on trade. The approach chosen is using a frequency count, which is the number of NTM on a single product. This novel method can be relevant if one can assume that NTM do have a cost for exporters, even if that cost is unknown. The key concept is the average cost of any NTM. This analysis checks whether more measures imposed on a single product, will increase difficulty for exporters to comply with all requisites and still being able to export competitively. European imports of agrifood products (at 4 digit level) is analysed, and data suggests that higher frequency of SPS measures may be significant to influence European imports from all countries, and it impacts LDC in special, particularly those in Africa. Exports could be reduced by around 3 per cent for all countries, and almost 5 per cent for LDC countries for each additional SPS requirement in the importing country. Countries in Asia do not seem to be affected, but this is probably because of trade patterns, since European Union is not a major market for agri-food exports coming from those countries. Other middle income countries are affected in a lesser way. This fact gives strength to the idea that the higher income in a country, the more resources are available to the companies operating in their territory to overcome obstacles posed by NTM in partner markets and continue exporting. Even in the evidence that NTM may negatively affect trade, negotiation for reduction, harmonization or elimination is not automatic or even desirable. Some policy implications are discussed based on the conclusions.