Export effects of non-tariff measures: The role of aid for trade

Abstract

This study aims to examine whether aid for trade can help recipient countries improve their ability to meet the non-tariff measures imposed by trading partners and alleviate these measures’ negative impacts on their exports. For this purpose, we examine the impacts of technical barriers to trade that raise special trade concerns (TBT-STC), aid for trade and their interactions on the manufacturing exports of aid-recipient countries. The main findings are that the highly restrictive TBT measures have seriously hindered the manufacturing exports of recipient countries; however, aid for trade not only directly promotes exports of recipient countries but also helps alleviate the negative impact of TBT-STC on their exports. This result provides empirical evidence to support the proposal. We attempt a more-detailed analysis to assess the heterogeneity of the above-mentioned mechanisms on countries’ income levels and the types of aid for trade.