Explaining Variation in the Use of NTBs in Developed Countries: The Role of Political Institutions

Abstract

Despite the much-touted celebration of the successes of the General Agreement on Tariffs and Trade/World Trade Organization in liberalizing free trade, these successes have been limited due to the increasing use of non-tariff barriers (NTBs) as a form of ‘protectionism in disguise.’ Among advanced industrial economies, the use of NTBs varies considerably. The purpose of this paper is to explain what accounts for this variation. We locate the issue of international trade in its appropriate theoretical context — as a two-level game in which politicians simultaneously face pressure at the international level to fulfill commitments to international free trade agreements, and domestic pressures for protectionist relief. We conduct a statistical analysis using a simple, multivariate regression model examining data at three points in time, 1988, 1993, and1996, to highlight the causes of the rise in NTBs and variation in their usage. We hypothesize that PR-based systems are associated with lower rather than higher levels of NTBs.