Non-tariff Policy Research Articles

The Influence of Tariff and Non-Tariff Implementation on International Trade in the Textile Industry on Madura Island, East Java Province

This research explores the impact of tariff and non-tariff barriers on international trade within the textile industry in Madura Island, East Java Province. The study assumes that trade policies, both in the form of tariffs and non-tariff barriers, have significant effects on the competitiveness of the local textile industry in the global market. Data were collected through a quantitative survey of 100 textile industry players involved in international trade. A multiple linear regression method was employed to analyze the impact of independent variables (tariff and non-tariff barriers) on the dependent variables (exports and imports). The analysis results indicate that tariffs significantly reduce textile export volumes, while non-tariff barriers have a more significant impact on import volumes. These findings provide valuable insights for policymakers regarding the importance of balancing tariff and non-tariff policies to enhance the competitiveness of the textile industry in the international market.

Impacts of trade policy on the welfare of citrus producers and consumers in Indonesia

PurposeThis study aims to investigate the factors influencing the citrus trade in Indonesia, the effects of tariff and non-tariff policies on the industry and the welfare of producers and consumers.Design/methodology/approachThe research used annual series data from 1991 to 2021 and employed inferential, simulation, and descriptive analyses. The two-stage least squares (2SLS) of 19 simultaneous equations were used to estimate parameters.FindingsThe results indicate that free trade policies and restrictions have influenced the citrus industry, leading to a reduction in Indonesian citrus imports, and increased consumer and producer prices. However, eliminating import tariff policies on citrus from China and import restrictions increased producer surplus while decreasing consumer surplus, government revenue, and total welfare. Therefore, trade policies should be combined with non-trade policies such as citrus region development policies and advancing cultivation technology.Originality/valueThis study provides empirical evidence for the Indonesian government to formulate effective citrus trade and development policies. It emphasizes the importance of carefully considering the impact of trade policy on the citrus industry and the need to implement non-trade policies such as citrus zone development policies and advancing cultivation technology to benefit both producers and consumers.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-02-2023-0148

Economic independence of the Republic of Moldova

The current international economic and political situation proves to us once more that economic independence is a fundamental premise for strengthening the independence, sovereignty and national integrity of the Republic of Moldova. Epidemiological, political, economic and energy tensions, which deeply disturb the contemporary world economy, create great problems for developing countries, with economies vulnerable to fluctuations in the world market, to tariff and non-tariff policies promoted by various states, organizations or international institutions. Increasing the degree of autonomy and national security in key areas such as energy, health care, agriculture and food, etc. represents a major objective for every state in the world.

Dampak Kebijakan Tarif dan Non-tarif Negara-Negara Importir atas Ekspor Tuna Olahan Indonesia

This study aims to analyze the impact of the tariff and non-tariff policies implementation of the importing countries on the export performance of Indonesian processed tuna. A cross-sectional gravity model analysis was conducted to find out the impact of these policies on exports. The variables used include GDP per capita of the importing countries, population, economic distance, export prices, actual exchange rates, tariff policies, and non-tariff policies in the form of sanitary and phytosanitary (SPS) and technical barriers to trade (TBT). The estimation shows that the variables of GDP per capita of the importing countries, population, exchange rates, export prices, and SPS give a positive and significant effect on the trade of Indonesian processed tuna commodities. On the other hand, economic distance and TBT policy give a negative and significant impact on the volume of this particular commodity. Meanwhile, the tariff policy implementation also give a negative effect on the export volume, but it is not significant.
 
 Keywords: cross sectional gravity, export performance, non-tariffs, tariffs

Import demand elasticities revisited

Import demand elasticities are regularly used to compute trade restrictiveness indices, to transform estimated effects of trade policies into ad-valorem equivalents, or to judge on the prohibitive level of various tariff and non-tariff policy instruments. The fast rising number of negotiations of free trade agreements and the fact that non-tariff measures are at the core of these strongly motivates for an update of the import demand elasticity estimates provided by Kee, Nicita, and Olarreaga in 2008 which are based on trade data for the period 1988–2001. Following their GDP function approach, we present import demand elasticities for more than 150 countries and over 5000 products over the period 1996–2014. Countries exhibiting the highest average elasticities belong to the economically biggest countries in their respective regions, while countries with the lowest import demand elasticities are typically small island states. Import-weighted results suggest that especially countries rich in natural resources are facing an inelastic import demand, with the agri-food sector being more price-responsive than the manufacturing sector. Finally, import demand for intermediate goods seems to be more elastic than demand for products destined for final consumption.

Subsidies, Spillovers and Multilateral Cooperation

Negative international spillovers created by nontariff policies are a rising source of trade tensions and conflicts. The WTO does not include rules for subsidies for services industries, state-owned enterprises or investment incentives. Existing disciplines on industrial policies are increasingly seen to be inadequate by many WTO members. Efforts to revisit and expand rules for contested policies must recognize the changing nature of international production. A first step in addressing trade conflicts associated with industrial policies is to determine where negative international competition spillovers are both large and systemic in nature. Doing so requires going beyond trade ministries and bringing in finance and line ministries, as well as competition agencies and international organizations with expertise in collecting information on subsidies and analyzing their effects.

Revitalising Multilateral Trade Governance

The WTO provides extensive flexibility for members to engage with each other. Using this, WTO members should identify a road map for the future and a work programme to update and expand the rulebook to address trade-distorting nontariff policies that are not or only partially covered by current WTO rules. Expanding the WTO rulebook, accepting greater reciprocity and improving the organisation’s operation are necessary for revitalising the WTO.

MFN Clubs and Scheduling Additional Commitments in the GATT: Learning from the GATS

Scheduling additional commitments for policies affecting trade in goods in the GATT has been plagued by two sources of ambiguity: the treatment of changes introduced unilaterally by members subsequent to an initial commitment, and the treatment of new commitments by WTO members pertaining to nontariff policy measures affecting trade in goods. This is not the case for trade in services, as the GATS makes explicit provision for additional commitments to be scheduled. Neither secondary law, in the form of decisions formally adopted by the WTO membership, nor case law has clarified the situation for trade in goods. This matter is important for the WTO as it determines the feasibility of clubs of countries agreeing to new enforceable policy disciplines that bind only signatories but are applied on a non-discriminatory basis to all WTO members. In this paper, we discuss the legal state of play and the ‘policy space’ that WTO members have to establish new MFN club-based disciplines for nontariff measures.

MFN Clubs and Scheduling Additional Commitments in the GATT: Learning from the GATS

Scheduling additional commitments for policies affecting trade in goods in the GATT has been plagued by two sources of ambiguity: the treatment of changes introduced unilaterally by members subsequent to an initial commitment, and the treatment of new commitments by WTO members pertaining to nontariff policy measures affecting trade in goods. This is not the case for trade in services, as the GATS makes explicit provision for additional commitments to be scheduled. Neither secondary law, in the form of decisions formally adopted by the WTO membership, nor case law has clarified the situation for trade in goods. This matter is important for the WTO as it determines the feasibility of clubs of countries agreeing to new enforceable policy disciplines that bind only signatories but are applied on a non-discriminatory basis to all WTO members. In this paper, we discuss the legal state of play and the ‘policy space’ that WTO members have to establish new MFN club-based disciplines for nontariff measures.

PENGARUH MISALIGNMENT NILAI TUKAR TERHADAP KEBIJAKAN SAFEGUARDS DI ASEAN-5

The purposes of this study are to analyze the occurence of exchange rate misalignment and its effect on non-tariff policy in ASEAN-5. We use Panel Dynamic OLS to estimate the equilibrium real exchange rate, while for determining the opportunities of the Non-Tariff Measures (NTMs) such as safeguards measures;we use Conditional Fixed-Effects Logistic Regression. The results shows that the magnitude of exchange rate misalignment tends to be large when specific country has a domestic turmoil. In addition, undervalued currrency of exporting country will increase the chances of safeguards measures enforcement from partner countries.

Measuring the Price Effects of Import Restrictions: Theory and Evidence

In a world of decreasing tariffs, non-tariff barriers (NTBs) have gained in importance and are receiving growing attention in trade negotiations. Comprising a myriad of different policies, NTBs are not straightforward to quantify. An intuitive and meaningful equivalence measure is the price impact of non-tariff policies. This paper offers a theoretical foundation for the previously rather 'atheoretical' literature of such price comparisons. The effects of quantitative restrictions and technical barriers to trade (TBT and SPS) on final consumption prices are estimated for 35 products comprised in the sectors fruits & vegetables, meat and textiles in a large cross-section of countries for the year 2008. Price increasing effects of both NTB types turn out to be large and statistically significant in many cases. Results, however, are very sensitive to different empirical specifications and sometimes exhibit theory-inconsistent coefficients. Measurement issues are therefore discussed in detail and should serve as a guideline for further research.

BORDER BARRIERS IN AGRICULTURAL TRADE AND THE IMPACT OF THEIR ELIMINATION: EVIDENCE FROM EAST ASIA

We investigate the impact of the elimination of import tariffs and nontariff policy barriers (NTPBs) on agricultural trade in a notional East Asian Free Trade Agreement using a Global Trade Analysis Project (GTAP)‐based computable general equilibrium model. The investigation is divided into two parts. We first measure the NTPBs by employing a widely used method derived from the literature on border effects. Then, by adding into the GTAP database our estimates on the NTPBs, which the original GTAP database by its nature does incorporate, we compute the impact of the entire elimination of policy barriers (the complete reduction of import tariffs and NTPBs) on GDP. The result shows that there are remarkable differences between the effect of abolition of import tariffs and that of entire elimination of all import barriers.

Pitfalls in the Use of Ad Valorem Equivalent Representations of the Trade Impacts of Domestic Policies

Numerical simulation exercises to analyze the impacts of potential changes in non-tariff policies commonly use ad valorem equivalent tariff treatment even though estimated impacts using explicit model representation and ad valorem equivalent treatments will differ. The difficulty for modellers is that the detail and subtlety embodied in a wide array of policy interventions means that some simplification is appealing, but no meaningful general propositions exist in the theoretical literature as to the sign or size of the differences in predicted effects. All that can seemingly be done is to investigate the differences case by case, but even here the findings are sensitive both to the particular form of model used as well as the model parameterization employed. As a result, there is relatively little in the literature that provides guidance as to how serious the pitfalls may be, and how misleading ad valorem tariff equivalent treatment is. Here I draw on three examples of numerical modelling where explicit representation of policy interventions are used. The picture that emerges is one of large quantitative and even qualitative differences in predicted impacts. These examples suggest that where interventions differ from a tariff, ad valorem representation should be undertaken in numerical trade modelling only with substantial caveats.

Will the success of trade policy undermine the world trading system ?

A great transformation is under way in international relations. The influence of non-state actors is rising, and the focus of intergovernmental coordination is shifting from border measures, such as tariffs, to a myriad of policies that traditionally have been the sole province of national decision making, such as food safety standards. This transformation is most evident where international cooperation has been most successful : international trade, in particular the efforts within the World Trade Organization (WTO) to manage non-tariff barriers to trade. In many cases it has proved extremely difficult for nations to comply with WTO strictures on non-tariff policies because these policies are embedded within an array of political supporters and institutions that democratic governments find difficult (and politically costly) to unravel. We focus on these "problem cases" — where the goal of liberalizing trade conflicts with popular consumer preferences — and suggest that these pose a threat to the legal integrity and political sustainability of the WTO. Ironically, cases marked by relatively low economic stakes may pose the greatest threats because these cases are less likely to be linked to other important benefits of international cooperation, and thus governments are less likely to seek an intergovernmental solution to avert non-compliance in such situations. We suggest that formal remedies to this problem are unlikely to be successful ; rather, restraint by key states is likely to be the most effective way for the world trading community to learn to avoid and abate these problem cases before they overwhelm the world trading system.

Exportindustrieën in onderontwikkelde landen

In this survey article some global evidence is presented about desirable changes in the pattern of the world economy, especially the relations between poor and rich countries. The approach adopted is partially normative and partially positive. In the normative section the HeckscherOhlin theorem is used, following H. Lary, in order to find industries which preferably should be established in underdeveloped countries. In the positive part the growth of exports of these industries to industrial countries is analyzed. Another section is devoted to trade policies of industrial countries, including both tariff and non-tariff policy measures.