Abstract
This paper analyzes the evolution of the incidence and intensity of non-tariff measures (NTMs). It extends earlier work by measuring protection from NTMs over time from a newly available database and provides evidence on the evolution of NTMs. In particular, building on Kee et al. (Econ J 119(534):172–199, 2009), this paper estimates the ad valorem equivalents of NTMs for 97 countries at the product level over the period 1997–2015. We show that the incidence and the intensity of NTMs were both increasing over this period, with NTMs becoming an even more dominant source of trade protection. We are also able to investigate the evolution of overall protection derived jointly from tariffs and NTMs. The results show that the overall protection level, for most countries and products, has not decreased despite the fall in tariffs associated with multilateral, regional and bilateral trade agreements in recent decades. We also document an increase in overall trade protection during the recent 2008 financial crisis. Overall, this study sheds light on an under-researched aspect of trade liberalization: the proliferation and increase of NTMs.
Highlights
Trade reforms associated with multilateral, regional, bilateral and unilateral agreements in recent decades are seen as having reduced trade protection
We show that the incidence and the intensity of nontariff measures (NTMs) were both increasing over this period, with NTMs becoming an even more dominant source of trade protection
According to the United Nations Conference on Trade and Development (UNCTAD) Trade Analysis and Information System (TRAINS) database, the average tariff rates of agricultural products worldwide have decreased from 17.9% in 1997 to 10.51% in 2015 while the average tariff rates for non-agricultural products have decreased from 8.78% in 1997 to 5.36% in 2015
Summary
Trade reforms associated with multilateral, regional, bilateral and unilateral agreements in recent decades are seen as having reduced trade protection. The approach is to use a common metric for alternative trade policy instruments, allowing direct comparison with tariffs and measurement of the combined or overall level of trade protection.4 They estimate AVEs of NTMs at the product level and on average for 78 developing and developed countries. This is salient, as in subsequent work, Kee et al (2013) estimate the change in trade restrictiveness between 2008 and 2009 using indices based on the most-favored nation (MFN) tariff rate and antidumping measures, for a wide range of countries They conclude that increased protection from this restricted set of trade policy instruments accounted for a very small proportion of the decline in trade in the immediate post-financial crisis period.
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