Effects Of Non-tariff Barriers Research Articles

Evaluating the Effect of Tariff and Non-tariff Barriers on Exports in the Pre and Post China-Pak Free Trade Agreement (FTA) Period

Low trading costs, more significant consumer markets, and favourable economic ties between China and Pakistan provide a strong rationale for bilateral trade. Both countries have signed several bilateral trade agreements to boost mutual trade since 1963. The agreement that marked the beginning of a new era of cooperation between two trading partners and paved the way for free trade agreements was the Early Harvest Program (EHP), implemented in 2006. The first China-Pakistan Free Trade Agreement (CPFTA) was signed in November 2006 and became operational in 2007. CPFTA aimed to remove tariff and non-tariff barriers, enhance the comparative value of exports, and increase exportable surplus mainly through technical and financial cooperation. The paper critically evaluates the impact of tariff and non-tariff barriers on Pakistan’s key exports in the pre- and post-CPFTA period. Further, the study quantifies the impact of non-tariff barriers using quantitative techniques of restrictiveness index, converge ratio, and frequency index with 4-digit H.S. code industry-level data. The analysis reveals that China imposed a relatively high tariff rate on Pakistan's top five exports compared to China's other FTA partner countries. The results about the effect of non-tariff barriers (NTBs) show that exports related to cereals, edible fruits, and textile sectors are highly covered under Sanitary and Phytosanitary (SPS) and technical barriers to trade (TBT) despite FTA. Our findings have substantial implications for sustained trade ties between China and Pakistan.

Economic Effect and Resolution Idea of the THAAD Political Conflict on South Korea’s Exports to China

South Korea deployed the Terminal High Altitude Area Defense (THAAD) antimissile system in response to North Korea’s nuclear test, leading to the Chinese government’s opposition to THAAD, citing national security concerns. Chinese consumers held a large-scale “boycott for Korean products” campaign in 2014. In the same year, the China–South Korea free trade agreement (FTA) was signed. This study compares the double-difference (DID) and triple-difference (DDD) models using the impact of the THAAD political conflict on South Korean exports. In the DID model, THAAD reduced South Korean exports, while in the DDD model, the FTA effectively alleviated the impact of THAAD. The net difference of the FTA’s impact on the commodities boycotted in response to the THAAD conflict exists because some boycotted commodities were promoted by the FTA while others were not. The effect of the THAAD event shock was significant only in the first two years, with minimal subsequent changes in growth. THAAD and FTA’s dynamic effects provide evidence of how political conflict can eventually influence popular opinion and how the trade policy plays a significant role in the national conflict resolution. Finally, the study provides additional evidence on the effect of non-tariff barriers triggered by THAAD on the service industry.

Effect of Non-tariff Barriers on Maize Production and Marketing by Smallholder Farmers in Tanzania

This study assessed the effect of non-tariff barriers (NTBs) on the production and marketing of maize for smallholder farmers in Mbozi and Momba Districts located in Songwe region in Tanzania. A cross-sectional design was employed in gathering primary data. A two-stage stratified sampling procedure was used in the selection of 400 smallholder farmers, who were surveyed using standardized questionnaires. In estimating the effect of NTBs on maize production and supply, the duality model was employed. The results indicate that NTBs have a depressive effect on the quantity of maize produced and marketed. The findings further show that a unit increase in transaction costs attributed to NTBs could reduce the quantity of maize produced by 16 per cent in the two districts. Based on these findings, it is concluded that the quantity of maize produced and supplied by farmers in the two districts decreases with an increase in the NTB costs. The study recommends the reduction and/or removal of the NTBs, which impede maize production and marketing among smallholder farmers. This would help the government to achieve its goals of creating high prices in the surplus districts and attain low consumer prices in the deficit urban centers, thus reducing poverty.

Effects of non-tariff barriers on Thai exports of key vegetables to ASEAN countries

In the context of the ASEAN Free Trade Area, Thai exports of key vegetables have been affected by non-tariff barriers (NTBs) since 2010. This has led to the concern as to what extent such measures adopted by ASEAN countries have impacted the export of Thai vegetables. This study applied a gravity model under panel data where the estimates of a random effect model revealed that NTBs have caused damage to the export of root crops with a statistical significance of 0.01. On the other hand, a fixed effect model implied that NTBs were not the key trade barrier decreasing the export of Thai mushrooms to other ASEAN countries. Therefore, ASEAN should carefully reconsider NTB issues for the real benefit of farmers and consumers in the region in response to the Asian Economic Community (AEC) which was established in December 2015.

Effects of non-tariff barriers on Thai exports of key vegetables to ASEAN countries

Effects of non-tariff barriers on Thai exports of key vegetables to ASEAN countries

Economic Integration, Non-tariff Barriers and Social Welfare

This paper analyses the extent to which preferential trade agreements can lead to the substitution of non-tariff barriers for tariffs, and the effects of non-tariff barriers on welfare and other parameters. Its main results are that non-tariff barriers reduce aggregate welfare, and that the governments of economically integrated countries replace tariffs by non-tariff barriers if and only if their priority is protection of their nations’ firms.

How should “protection” be evaluated in Article III GATT disputes?

This paper considers the economic analysis of protection in Article III GATT disputes. We first observe that the appropriate measure of protection and the level of protection that is acceptable have hardly been discussed in the case law and that panels tend to presume that a strong substitution between domestic and foreign products always lead to substantial protection. Next, we consider a stylised model of trade and find that the ability to raise price is a robust measure of protection and that protection falls significantly (for a given barrier) with the degree of product differentiation but also with the degree of rivalry. We also observe that the effect of non-tariff barriers on import values is ambiguous, so that imports are not a robust measure of protection. Our findings suggest that the distinction drawn in the case law between “like” and “directly competitive and substitutable” products is not helpful. Finally, we suggest a method to evaluate protection in trade disputes, which is inspired by the definition of the relevant market in antitrust.

The costs of non-tariff barriers to trade: Evidence from New Zealand

The Costs of Non-Tariff Barriers to Trade: Evidence from New Zealand. — Recent work on trade policy with imperfect competition indicates that the adverse effects of non-tariff barriers to trade exceed those suggested by traditional theory. With market power in foreign supply, setting a restrictive non-tariff barrier will induce foreign exporters to raise their supply prices. The authors use the experiment provided by the comprehensive New Zealand economic reforms of the mid-1980s. Using panel data on export unit values from Germany and the United States to several destinations including New Zealand, they find some evidence for decreased export prices to New Zealand as a result of the dismantling of non-tariff barriers to trade.

Simulating Changes in Conjectural Variations: Tariff and Quota Nonequivalence in Food Processing

Increasingly, agricultural economists have argued that domestic and international agricultural and processed food markets are-at least to some degree-imperfectly competitive. While early work in this area simply imposed behavioral and structural forms on the international market under study (McCalla, and Alaouze, Watson and Sturgess), recent efforts have been to identify the appropriateness of these assumptions by explicitly testing for imperfectly competitive behavior. Relevant work includes that of Karp and Perloff, and Love and Murniningtyas. Similarly, a number of studies have tested for market power in domestic food markets (see Perloff for a useful summary). Lagging behind these recent developments has been the incorporation of imperfect competition into the modeling of agricultural trade policy reforms. For example, much of the work that has dominated assessment of the GATT Uruguay Round reforms (Tyers and Anderson) typically assumes perfectly competitive behavior in the food and agricultural sector, despite increasing evidence to the contrary. Recently, however, noncompetitive behavior in food processing has been incorporated into computable general equilibrium modeling of the effects of agricultural trade policy reform (Hertel). Clearly, further work in modelling policy outcomes in noncompetitive markets is important. We focus on a particular aspect of this agenda: how to handle empirically the effect of nontariff barriers (NTBs) in oligopolistic markets. Importance of NTBs in Trade Policy Analysis

Economic Effects of the Tokyo Round

The conclusion of the Tokyo Round of Multilateral Trade Negotiations (MTN) in April 1979 was an important milestone in international commercial diplomacy. It marked the seventh round of multilateral reductions in international trade barriers negotiated under the General Agreement on Tariffs and Trade (GATT) since World War II. Tariffs on industrial products had last been reduced on a major scale in the Kennedy Round, which concluded in 1967 and was implemented over the following five years. Tariffs are being reduced even further by the Tokyo Round, the reductions being phased in over eight years beginning 1980. An even more noteworthy accomplishment of the Tokyo Round is the negotiation of a series of codes covering nontariff barriers (NTBs). Depending on how these codes are interpreted and adhered to they will mean some significant reductions in NTBs and will clarify and harmonize government policies involving international trade. This paper provides an economic analysis of the effects of the Tokyo Round. It is organized as follows. In Section II, we examine the Tokyo Round negotiations, including the initial tariffs by country and sector, the tariff-cutting procedure and tariff offers and the NTB codes. In Section III, we present the combined effects of the reductions in tariffs and NTBs calculated using the Michigan model of world production and trade that we have developed for this and related purposes. In Section IV, we consider the possible effects of NTB codes that we were unable to quantify and also look at trade policies that were excluded from the Tokyo Round. In Section V, we offer concluding comments.

A new approach to estimation of the effects of non-tariff barriers to trade: An application to the Swedish textile and clothing industry

Ein neuer Ansatz zur SchAtzung der Wirkungen von nichttarifAren Handelsschranken: Eine Anwendung auf die schwedische Textil-und Bekleidungsindustrie. — Der Aufsatz hat das Ziel, die Wirkungen abzuschAtzen, die sich aus den VerAnderungen der nichttarifAren Handelsschranken fur Preise, BeschAftigung und Einfuhrvolumen ergeben. Um diese Wirkungen zu untersuchen, wurde ein Ansatz benutzt, der mindestens drei Vorzuge gegenuber denjenigen hat, mit denen in anderen Studien die Folgen der verstArkten EntwicklungslAnder-exporte fur die IndustrielAnder analysiert wurden. Erstens bringt er ausdrucklich die Preise ins Spiel, wodurch die Moglichkeit eroffnet wird, den Gewinn abzuschAtzen, den die Konsumenten infolge erhohter Importe und die EntwicklungslAnder infolge erhohter Exporte haben. Zweitens wird in dieser Untersuchung die potentielle Arbeitslosigkeit in den Grenzbetrieben der einzelnen Branchen ermittelt, woraus sich eine Nachfragekurve fur Arbeit ableiten lA\t, die dem jeweiligen Industriezweig und dem jeweiligen Jahr zugeordnet werden kann. In anderen Studien wurde hAufig der durchschnittliche Arbeits-Output-Koeffizient benutzt. Da sich die Grenzbetriebe feststellen lassen, kann drittens genau angegeben werden, wie die potentielle Arbeitslosigkeit des Industriezweiges regional verteilt sein wird.