Non-tariff Measures Research Articles

US Barriers to International Trade of Goods: Tariffs and Non-Tariff Measures

US Barriers to International Trade of Goods: Tariffs and Non-Tariff Measures

ОСОБЛИВОСТІ РЕГУЛЮВАННЯ ЗОВНІШНЬОЕКОНОМІЧНОЇ ДІЯЛЬНОСТІ УКРАЇНИ В УМОВАХ ВІЙНИ

In the context of martial law, trade in goods in Ukraine requires a number of changes to protect national interests and the domestic market. The purpose of the article is to identify the key features of foreign economic activity regulation in Ukraine during the war. The Global Trade Alert database for the period of research 2009-2023 was used to conduct the study and analyze the regulation of Ukraine's foreign trade. The results indicate a significant increase in the share of Ukraine's exports and imports to European countries, particularly to the EU, and to Asian countries, which required adjustments to the foreign trade regulation policy from 2011 to 2021. During the period under study, trade policy was aimed at implementing liberalization and protectionist measures simultaneously, which were characterized by an average level of efficiency for certain product groups. During the period of martial law in 2022, 10 liberalization measures and 9 protectionist measures were introduced in trade in goods, particularly for certain European countries. The restrictive measures concerned Russia, European countries, Canada, the United States, and other countries, and were aimed at protecting the domestic market. The key sectors of liberalization in 2022 were cereals, products made of polymeric materials, certain types of equipment and machinery, equipment for electricity distribution, and certain types of fabrics. Legal changes during martial law are determined by domestic demand and external supply for certain groups of goods. The key measures regulating trade in goods in Ukraine are tariff measures, including export and import licensing requirements; export quotas and taxes; import tariffs; and domestic import taxation. In general, some of the regulatory measures discriminate against foreign commercial interests, while others ensure liberalization on a non-discriminatory basis. Non-tariff measures related to exports and imports mainly include sanitary and phytosanitary measures, technical barriers to trade, and precautionary measures.

Environmental Non-tariff Measures and Trade in APEC Member Economies

Environmental Non-tariff Measures and Trade in APEC Member Economies

A Multicommodity Spatial Price Equilibrium Model with Exchange Rates and Non-Tariff Measures for Agri-Food International Trade

A Multicommodity Spatial Price Equilibrium Model with Exchange Rates and Non-Tariff Measures for Agri-Food International Trade

Unchanging protectionism in the post-ATC Era: Non-tariff measures.

Purpose- This study explores the importance of non-tariff measures (NTMs) in the global textile and clothing trade. For this purpose, we consider the trade effects of other NTMs implemented instead of the quotas that expired in 2005 with the WTO Textile and Clothing Agreement (ATC). These results indicate that the textile and clothing trade continues to be protected by other non-tariff measures during the quota-free period. Methodology- Based on the example of Turkey, the study examines the effects of anti-dumping measures (ADP) on imports in the quota-free period compared to customs duties by using OLS and PPML methods for the period 2000-2020. Findings- The estimations indicate that the ADP measure of NTMs is much more effective than the tariff rates. The import value of textile and clothing might decline by 2,7%-4,1% due to a percentage point increase in the tariff rates compared to a decrease of 22,6%-78,6% following an ADP measure. This effect would be 5,2%-5,8% with one percentage point increase of tariffs, whereas 29,2%-78,2% after an ADP for the import volume. Conclusion- The results reveal that the anti-dumping measures, which replace quotas, could restrict imports more than customs duties. Thus, the protectionism in the global trade of textile and clothing industry continues with other NTMs instead of quotas.

NON-TARIFF REGULATION MEASURES IN CUSTOMS LAW

Necessary to point out that the current system of tariff regulation is a prerequisite for the implementation of an effective customs policy and the implementation by customs authorities of the tasks of ensuring the economic security of the country. However, most countries don’t currently have the ability to actively respond to changes in the terms of trade by reducing or increasing tariff rates. Therefore, against the backdrop of a decrease in the customs and tariff protection of national markets, the role of non-tariff means of foreign trade policy is growing. It is non-tariff measures that are the main tool for protecting the domestic market and the country’s economy from unfair actions of foreign states in the field of foreign trade. The preference given to non-tariff measures is due to the fact that, unlike tariff measures, they do not constitute an additional tax burden for the population.
 Purpose. The article is devoted to the characterization of legal regulation of non-tariff regulation measures. The authors give classification to these measures and pay attention to their individual types: for example, product quotas.
 Methodology. he basis of the study is the dialectical-materialistic method of knowing objective reality and the general scientific and private scientific methods based on it (comparison, analysis, deduction, induction, formal-logical, comparative-legal, formal-legal, system-structural, interpretation method).
 The results of the study consist in the analysis of the term «non-tariff regulation measures», the formulation of their typology, the grounds for their application. The authors formulate a proposal for their codification at the supranational level.
 Practical implications. The results of the study can be applied in the field of customs regulation or foreign trade.

The effect of trade and customs digitalization on agrifood trade: A gravity approach

Abstract Transaction costs create inefficiencies in agricultural markets, and poor trade digitalization lowers agrifood productivity of developing countries. This paper argues that trade facilitation via digitalization cuts transaction costs thereby increasing agrifood trade because it streamlines trade and customs operational procedures. Our methodology represents trade digitalization by the variables paperless trade and digitalized non-tariff measures compliance. Additionally, our empirical strategy utilizes cross-country data employing a gravity model with fixed effects and socioeconomic controls. We find a high-bar evidence that a one-standard deviation improvement in e-trade facilitation at the exporter level and in non-tariff measures digitalization at the importer level increase agrifood exports by 9.7 per cent and 1.3 per cent, respectively, with larger magnitudes for processed products and for Sub-Saharan African and Asian countries. Consequently, trade facilitation via customs digitalization is inevitable to avoid trade diversion in an increasingly competitive globalized world. There are opportunities for developing countries to benefit from such digitalization because the relationship is stronger between agrifood exports and e-trade facilitation at the origin, which increases the agency of countries in the Global South.

Groups of products with improved market access & improved exports

Introduction. The results of Ukraine’s activi­ties within the framework of the Association Agreement between the EU and Ukraine, inclu­ding provisions on the Deep and Comprehensive Free Trade Area (DCFTA), improving market access means not only the reduction of tariffs, but also the reduction of non-tariff measures through alignment with EU rules. Problem. Competition between rules leads to convergence of standards in practice. However, the issue of continuation of national diversities is empirical. The aim of the study is to identify the rela­tionship between product groups with improved access and exports within the study of Euro­pean perspectives for the further development of Ukraine. Methods. The study uses general and special research methods. Results. It is substantiated that Ukrainian business can increase the productivity and effi­ciency of its activities by adopting EU standards by 13–30 %. It is established that a smaller share of imports in a particular country’s total imports would imply greater trade costs in that country for the exporting country, and vice versa. All products with HS4 codes which market share in EU is less than market share in the world are identified. Ineffective products within the scope of the DCFTA have been identified. In order to identify these products a special formula is pro­posed. An economic-mathematical approach for evaluating export growth in conditions of con­flict-free trade is proposed. Conclusions. Tariffs are not the only barrier to market entry in the EU. Some of the largest trade transaction costs have been seen to be a major barrier to export development which was addressed within the DCFTA. Further inves­tigation could be focus on assessing the compe­titiveness of products with improved access.

Assessing the Impacts of Non-Tariff Measures on the Export of Vietnam’s Main Agricultural and Seafood Products

With the development of free trade agreements, tariff barriers are gradually removed, and non-tariff measures are playing an important role in the trade policies of countries. However, studies on the effects of non-tariff measures on trade show a great disparity in results and both negative and positive influences can be found when non-tariff measures are imposed in different contexts. The heterogeneity in the result is often hypothesized to be the consequence of intrinsic characteristics related to products and countries; therefore, arguably, unbiased and reliable estimation of non-tariff measure effect on trade should be analyzed in product level data for a specific country. Hence, the study attempts to use the gravity model and Poisson Pseudo-Maximum Likelihood estimation (PPML) to quantify the effects of non-tariff measures on the export of some agricultural and seafood products of Vietnam to certain main markets including the United States (US), European Union (EU), China, and Japan. The research findings show that from a national perspective, non-tariff measures mostly have a negative impact on agricultural exports, especially sanitary and phytosanitary measures (SPM), and countervailing measures (CM). In terms of commodities, coffee and seafood are particularly sensitive to non-tariff measures, while other key agricultural product groups are mostly affected by tariff measures.

New Price-based Bilateral Ad-valorem Equivalent Estimates of Non-tariff Measures

As global applied tariffs continue to decline, and the stock of non-tariff measures continues to increase, applied international trade researchers increasingly seek to evaluate the effects of non-tariff measure (NTM) policies. This, however, requires their quantification – a non-trivial estimation task that needs to be undertaken at a disaggregated level. Estimation of ad-valorem-equivalents (AVEs) of NTMs is generally conducted using one of two approaches: price-based or quantity-based. This study uses a price-based approach to estimate AVEs at the Harmonised System (HS) six-digit level. Bilateral Global Trade Analysis Project (GTAP) sector-specific AVEs are obtained by aggregating the derived AVE estimates, using HS-GTAP sector concordance and HS six-digit level bilateral trade flows as weights. A key advantage of the price-based estimation method used in this study is that the AVEs can be directly used in the GTAP model, without the need to adjust them based on import-demand elasticities. Derived AVEs estimated in this study are also importer/partner-specific and rely on counts of NTMs rather than simply instances of NTMs. This paper provides GTAP-consistent estimates and aggregation code to facilitate custom GTAP aggregations of AVEs, as well as replicable, open source code that can be altered based on users' assumptions or particular research needs.

Deeper Integration or Open Regionalism in the Indian Ocean Rim Association (IORA): A CGE Approach

The Indian Ocean Rim Association (IORA) is a regional association based on the principle of open regionalism to promote liberalization through trade and investment facilitation. This study compares two main scenarios with the ingredients of a deeper regional integration compared to the IORA's present open regionalism status. Scenario I evaluates the effects of gradual tariff cuts on IORA, while Scenario II combines the impact of tariff cuts, non-tariff measures (NTM) reduction, and trade facilitation. A recent recursive dynamic model, called Global Trade Analysis Project recursive dynamic model (GTAP-RD), was used to understand the adjustment path. The result shows welfare gain for all IORA countries when a trade liberalization involving tariff cuts is complemented with NTM reduction and trade facilitation. In addition, the "NTM spillover" effect on some non-IORA members (the rest of Gulf Cooperation Council, the rest of Greater Arab Free Trade Agreement, and the United Kingdom) was observed. The results suggest that IORA has more to gain if it involves a deeper regional integration than the present form of open regionalism.

Murky trade waters: Regional tariff commitments and non-tariff measures in Africa

In several African regions, economic integration has successfully reduced tariff protection by freezing the opportunity to raise applied tariffs against fellow integration partners above those promised. We examine whether these regional tariff commitments have come at the expense of adverse side-effects on the prevalence of non-tariff trade barriers. Comparing the effects of applied tariff overhangs – the difference between MFN bound tariffs and effectively applied tariffs – towards all vis-à-vis African trading partners on SPS and TBT notifications of 35 African WTO members from 2001-2017, we find no general relationship between tariff overhangs and import regulation in our preferred model setting. Larger tariff overhangs specific to intra-African trade relations, however, increase the probability of SPS measures and TBT and thereby contrast with the common assumption of the former functioning as a flexible policy valve. We see the nature of Africa’s formal trade relations as an explanation for these findings. While regional tariff commitments have not only significantly moved African countries away from multilateral commitments, they have also sharply reduced their tariff policy space within Africa, thus seemingly leaving regulatory policy as one of the few legitimate options to level the playing field with the by far closest market competitors.

Misinvoicing in Benin's International Trade: An Analysis from Mirror Statistics

The aim of this work is twofold : to measure the level of misinvoicing in Benin's trade with its main trading partners and to determine its causes. First, based on mirror statistics, we estimate the gross trade discrepancies at about $3.065 billion on average over the period 2000-2017. Its very important development represents more than 350% increase in 18 years. Fraud is dominated by under-invoicing of both imports and exports. The countries most prone to fraud are mainly Asian countries (China, India, and Malaysia), while the most misreported products are mainly those with low proportions of trade (fabrics, textiles and second-hand goods, palm oil, vehicles and motorcycles, cashew nuts, wood and wooden goods). Second, the econometric results obtained from the Pannel Corrected Standards Errors (PCSE) methods showed that the determinants of misinvoicing are customs tariffs, the Benin/Nigeria tariff differential, the share of trade in a product, and indicator variables such as the introduction of the PVI, the perishability of a product, the region of origin, and the tariff and non-tariff measures enacted in recent years. In light of our results, Benin needs to review its trade policy and work toward more effective management of its international trade flows. At the same time, international organizations such as the WTO and the WCO must cooperate and coordinate the management of international trade to control fraud.

Non-Tariff Measures and Competitiveness of Indonesia’s Natural Rubber Export in Destination Countries

In the last few decades, the implementation of tariff policies between countries has declined. As a result, the enforcement of non-tariff measures (NTMs) experiences an increase. Implementing NTMs raises a new obstacle to trade activities in the global market, including the trade of Indonesia’s natural rubber. Therefore, this study was conducted to determine the effect of enforcing NTMs on the export competitiveness of Indonesia’s natural rubber. This study utilized secondary data from UN COMTRADE on 1995 to 2019. The data was analyzed using frequency index, coverage ratio, comparative advantage, and two-stage least square regression model. The results revealed that India, China, and the USA enforced the most NTMs of Indonesia’s natural rubber. Additionally, the implementation of NTMs in importing countries positively correlated to the export competitiveness of Indonesia’s natural rubber in destination countries.

Effects of non-tariff measures on tea exports from Sri Lanka

This study employed the gravity model of trade to examine the effects of non-tariff measures (NTMs) on Sri Lankan tea exports. The study used a panel data set including bilateral exports retrieved from Sri Lanka and its ten major tea export destinations from 2010 to 2019. The frequency of NTMs on Sri Lankan value of tea exports shows an increasing trend. The gravity model estimations show that except for tariff, the coefficients of all other gravity variables are statistically significant and aligned with theoretical justifications. The magnitude of the gross domestic product of Sri Lanka and importer countries and the presence of colonial links positively act on tea exports from Sri Lanka, while the distance between capital cities of trading partners and NTMs lower the exports. More specifically, imposing an additional NTM diminishes the value of tea exports by 48%. Furthermore, the NTMs have a 66% tariff equivalent effect. Hence, Sri Lanka's best prospects for profiting from tea exports depend on altering NTM policies, which are just as significant as other trade barriers.

Trade liberalisation, imperfect pass-through and cost of living: evidence from Chinese cities

This article investigates the consumption effect of trade liberalisation through changes in the cost of living in Chinese cities. We use fixed effects model and dynamic panel model based on household survey data from 2002 to 2009. We identify the imperfect pass-through mechanism of tariffs and non-tariff measures at city level. The main findings show that the aggregate cost of living in Chinese cities is an inverted-V trend. Tariffs reduction and the high incidence of non-tariff measures can decrease cost of living in Chinese cities, which improves the overall consumption welfare and narrows down the regional disparities. The consumption effects are heterogenous due to the diverse spatial effects, demand effects and competition effects across Chinese cities. Cities with a high expenditure share of manufactured goods have a larger effect on the reduction of cost of living. Tariffs have a larger marginal effect in small cities and cities with high level of privatisation. While the incidence of non-tariff measures has a larger marginal effect in small cities and cities with low level of privatisation.

Reliance on Non-tariff Measures for Self-Reliant India: An Analysis of India’s New Trade Policy Orientation

With the introduction of the Self-Reliant India initiative, the Government of India (GOI) has underlined the importance of trade policy instruments to augment the capabilities of the domestic manufacturing sector. It has used both tariffs and non-tariff measures (NTMs) but NTMs have emerged as an important instrument of India’s trade strategy under the Self-Reliant India initiative. This article analyses selected NTMs i.e., import monitoring mechanism, quality standards (QSs), and changes in Rules of Origin (RoO) to understand the broader orientation of India’s trade policy. Findings demonstrate that the introduction of these NTMs are aimed at fostering a strong ecosystem for NTMs to restrict imports thereby extending protection to the domestic industry from international competition. It also reflects that India’s broad trade policy orientation is gradually moving towards a protectionist regime under the ‘self-reliant’ agenda. Trade policy, Non-Tariff measures, Non-Tariff Barriers, Import monitoring system, Quality standards, Rules of origin, Self-Reliant, etc.

Non-Tariff Measures as Export Barrier: Insights from Malaysia’s Small and Medium Enterprises in Agribusiness

The proliferation of non-tariff measures (NTMs) globally has become a major concern for exporters following on their potential to restrict export. Within this realm, particular attention is to be given to understand NTMs’ impact on small and medium enterprises (SMEs) in agribusiness due to: (1) SMEs’ vulnerability compared to multinational corporations; and (2) agricultural industry inclines to have more NTMs because of concern on health and safety. As such, this study aims to determine the impacts of NTMs on export capacity of agri-business smalls in Malaysia. This study adopts qualitative approach. The researchers had conducted face-to-face, semi-structured interview sessions with government officials and selected agribusiness SMEs. The key findings of the study are: (1) NTMs pose additional financial and capacity challenges to agribusiness SMEs; and (2) NTMs not only a concern when exporting agribusiness product to United States of America and European markets, but it is also an issue when exporting to Asia-Pacific and Association of South East Asian Nations (ASEAN) countries. This study further reveals that even domestic NTMs act as export barrier to agribusiness SMEs.

Economic integration and food security – The case of the AfCFTA

The study assesses potential effects of the African Continental Free Trade Area (AfCFTA) on agri-food sectors and food security in Africa. It employs the global Computable General Equilibrium model MAGNET in an ex ante analysis. The analysis has high regional and sectoral detail, representing the wide variety of African economies and trade policy strategies.The AfCFTA lifts 1.0 million people from risk of hunger while increasing national incomes. The rise in food prices offsets the increase in household income in a few regions. Food production increases in total, but several regions reduce production while increasing imports. Non-tariff measure reductions have higher impact than tariff cuts. A group of countries could experience adverse food security effects due to the AfCFTA.

How big a drop in agricultural exports to the United Kingdom after Brexit? Simulations for sensitive products of four Visegrad countries.

After the European Union (EU) was left by the United Kingdom (UK), a free trade area was established between these economies. Although bilateral trade in all goods is tariff-free, regulatory requirements make exports more costly and burdensome. We used a partial equilibrium model to analyze the implications of Brexit for agricultural exports from Visegrad countries (Czechia, Hungary, Poland and Slovakia). We assess trade creation and trade diversion effects resulting from an increase in non-tariff measures and border costs for 4-digit agricultural products identified as sensitive in each of the Visegrad countries. The simulations reveal that exports of sensitive products from Visegrad countries to the UK could decrease by up to 20%. While the macroeconomic importance of this change is not significant, for the producers of the sensitive goods such export losses are substantial.