Tariff Barriers Research Articles

The Urgency of Free Trade Agreements (FTA) and Digital Platforms for MSMEs in Realizing a Sustainable Digital Economy

Free Trade Areas (FTAs) offer significant opportunities for Micro, Small and Medium Enterprises (MSMEs) by providing access to international markets without tariff barriers. However, MSMEs often face challenges such as limited understanding of FTA regulations and difficulties in accessing global markets. This article discusses the need to develop a global digital marketplace platform specifically designed for MSMEs with FTA integration to address these challenges. The study uses a qualitative approach, analyzing relevant journals and articles to identify the needs of MSMEs and how digital platforms can support them in maximizing the benefits of FTAs. The discussion aims to provide solutions to market access limitations and information barriers, contributing to the growth and innovation of MSMEs towards a more inclusive and sustainable digital economy.

How Product Standards Influence Tea Exports? Empirical Evidence from India

India has witnessed a declining trend in tea exports in the recent period, which can partly be attributed to competition from exporters (e.g., Kenya and Sri Lanka) enjoying price advantages over the Indian varieties. However, although after the inception of the World Trade Organization (WTO) in 1995, the tariff barriers on Indian tea exports have come down across developed partners, the incidence of non-tariff barriers (NTBs) has emerged as a challenge in many destinations, with a possible dampening effect on exports. The present analysis attempts to analyse whether the imposition of product standard related measures, particularly sanitary and phytosanitary (SPS) and Technical Barriers to Trade (TBT) interventions, may have negatively influenced Indian tea exports over the period 1996–2021. Rather than considering the mere presence of SPS–TBT standards in major partner countries, their potential impacts on Indian tea exports have been determined by analysing the stringency levels of the corresponding notifications submitted to the WTO. The constructed stringency patterns are then incorporated into the Poisson pseudo maximum likelihood estimation models. The observed negative influence of standard-related measures in partner countries on Indian tea exports calls for policy interventions to enable the sector to better ensure compliance in the future.

Sales planning for platinum group metals: Segmentation and optimization

Subject. The article considers sales of platinum group metals on the case of a Russian mining and metallurgical company in the context of tariff barriers in some key markets and increased competition. Objectives. The purpose is to develop a set of methods to ensure the full sale of platinum group metals produced by the company and maximize profits from their sale under the introduction of import duties discriminating against metals of Russian origin and increased competition among suppliers for consumers due to redistribution of commodity flows. Methods. The study employs methods of logical, statistical analysis, and optimization. Results. The paper formulates a methodology for the sale of Russian platinum group metals in the duty-free markets of Europe, China, Japan and the rest of the world, presents a monthly optimization model enabling to calculate the discount rate for the sale of platinum, palladium and rhodium in full. For the Russian mining and metallurgical company, I developed individual recommendations on cooperation tactics and pricing policy for each group of consumers. Conclusions. The demand for platinum and palladium is price elastic. Depending on the degree of market changes, the sales methodology and its tools should provide necessary flexibility, including price, based on the optimality of solving operational and tactical tasks.

Japan and South Korea's engagement in the Chinese market post-RCEP implementation: A case study of the semiconductor industry

After the RCEP implementation in 2022, trade differences emerged between Japan and South Korea with China, especially in semiconductors. Japan's exports to China declined, while South Korea's grew. This study uses qualitative and quantitative methods to explain post-RCEP semiconductor trade differences, focusing on value chain complementarity, new tariff rates, and U.S. factors. Three conclusions: 1) Within the global value chain, the different positions of Japan and South Korea in the semiconductor sectors compared to China result in varying levels of market complementarity between Japan and China and South Korea and China; South Korea, in particular, exhibits a significantly higher potential market. 2) In terms of reducing tariff barriers under RCEP, compared to Japan, South Korea experienced a more substantial decline in semiconductor tariff rates in the Chinese market. 3) The non-tariff barrier sanctions imposed by the United States on Chinese semiconductors in 2022 influenced trade choices for Japan and South Korea. Japan, being more loyal to the United States, tends to align with U.S. policies, leading to a reduction in semiconductor trade with China.

Examining the impact of intra-industry trade on business cycle alignment within the ECOWAS

PurposeThis paper aims to examine the impact of intra-industry trade on business cycle synchronization within the Economic Community of West African States (ECOWAS). ECOWAS region is characterized by limited intracommunity trade and a low level of foreign direct investment.Design/methodology/approachFirst, this research uses the two-digit level harmonized system classification to measure intra-industry trade, which is straightforward to interpret and compute, making it suitable for countries with low trade intensity. Second, it uses the system generalized method of moments (system-GMM) to examine the dynamic relationship between variables and address endogeneity concerns.FindingsThe results obtained from the system-GMM estimation reveal a positive and significant correlation between intra-industry trade intensity and business cycle synchronization, as well as an inhibiting effect of economic freedom on the relationship between intra-industry trade and business cycle synchronization. These results highlight the need to implement policies aimed at reducing tariff barriers, improving financial integration and intensifying production.Originality/valueThis research analyze the link between intra-industry trade and business cycle synchronization within the ECOWAS. It also analyze the role of economic freedom on the link between intra-industry trade and business cycle synchronization.

African Union (Au) and Challenges of Intra-African Trade: A Study of African Continental Free Trade Pact, 2018- 2023.

The study assessed the efforts of the African Union in addressing the challenge of poor intra-African trade using the AfCFTA between 2018 and 2023. The study specifically examined how the implementation of the AFCFTA impacted on intra-African trade profile, as well as how the African Union fared in deepening Africa’s market integration using the mechanisms of the AfCFTA. Anchored on the documentary method and Neo-functionalism, the study ascertained that the implementation of the AFCFTA has undermined the intra-African trade profile. The study also revealed that the African Union has not fared well in deepening Africa’s market integration using the mechanisms of the AfCFTA. Accordingly, the study contends that the AfCFTA deal, though a laudable initiative, may not surmount the enduring structural challenges to regional integration to reposition African economies and expand opportunities for all Africans as projected. The study thus underscores the fact that despite AfCFTA deal, Africa is likely to remain an ultimate loser in the growing regional trade arrangement which is a major feature of the world trading system. Among others, the study recommends that the African Union, through the mechanisms of AfCFTA, should work towards removing all non-tariff barriers and reducing tariff barriers that undermine intra-African trade. Keywords: AfCFTA, Intra-African Trade, Market Integration, Non-Tariff Barriers, Region Trade Challenges.

GLOBAL VALUE CHAINS AS THE MAIN INSTITUTE OF CONTEMPORARY CREATIVE BUSINESS RELATIONSHIPS

Research into the creation and functioning of global value chains helps today's economists, business analysts, and policy makers make informed decisions to improve the global economic landscape and ensure sustainable development for all countries. The article examines the influence of global value chains on the world economy. The work uses the method of the unity of historical and logical analysis. Methods of comparative, causal and functional analysis, principles of system analysis, dialectical approach in the study of processes and phenomena are also used. The concept of the "smile curve" was analyzed to highlight the unevenness of the distribution of added value in different segments of the production chain. They point out that GVS often concentrate maximum value in research and development and post-production services. A study of the "sad smile" phenomenon highlighted that industries moving from mass production to personalization through artificial intelligence technologies may experience cost reduction in the initial and final stages of production. At the same time, companies located in the country of origin receive the greatest added value. The article focuses on the challenges that developing countries face in trying to get out of the "middle-income trap." Such challenges include tariff barriers, concentration of patents on knowledge and financing in these countries. The article argues that the GVS institute contributes to the appropriation of imperialist rent by the countries of the center at the expense of the countries of the periphery. Global chains enable the capital of the North to exploit the cheap labor of the South, keeping their incomes low and affecting their ecology. Recommendations are proposed for effective regulation and redistribution of added value to achieve sustainable global development.

A Study of Global Trade War and Its Impact on Indian Economy

A Study of Global Trade War and Its Impact on Indian Economy

Sustainable Natural Resources and Environmental Issues about Free Trade in the World Trade Organization (WTO) System

The aims of this research is the influence of free trade within the framework of the World Trade Organization-General Agreement on Tariffs and Trade on the environment and natural resources. Nowadays, there are almost no tariff barriers in trade. The research methods used a normative research or library research using qualitative research methods, which does not use statistical measuring instruments. The research results show that the development of globalized trade is due to free trade regulated according to the principles of the General Agreement on Tariff and Trade (GATT)-World Trade Organization (WTO), which encourages free trade aspects with a focus on eliminating barriers to trade, while environmental policy is not as a priority. However, environmental policies are formulated to guarantee the sustainability of trade itself. Typically, environmental pollution stems from the production processes involved in manufacturing goods, the transportation of goods utilizing public infrastructure, and the disposal of waste arising from product packaging or substances that are challenging to decompose naturally. Despite the issuance of environmental policies, these issues often persist without effective resolution.There are only a few countries that have good environmental regulations that can make environmental policies can be effective, which are developed countries that already have Eco-friendly technologies used for environmental control. The efforts that have been made by countries to create a balance between the profits obtained from trade itself and environmental conservation and natural resources are focused on environmental policy at the national level. Countries create environmental standards that are adapted to environmental standards and have been agreed at the international level. Furthermore, various approaches are being implemented to achieve higher environmental standards, through international organizations and multilateral agreements related to preserving the environment and natural resources.

Economic Aspects of Australian Federation: Trade Restrictiveness and Welfare Effects in the Colonies and the Commonwealth, 1900–3*

Australian Federation in 1901 entailed the formation of a customs union among its formerly tariff‐autonomous colonies. Although the elimination of tariff barriers to intercolonial/interstate trade would have been welfare‐enhancing, Australia's common external tariff was set considerably higher than the tariffs on external goods imported by the pre‐Federation colonies, implying a welfare reduction. Using a dataset of 3,584 commodity‐ and colony‐disaggregated imports, this paper estimates trade restrictiveness indices and welfare losses for the Australian colonies and Commonwealth. Despite the high external tariff post Federation, the customs union produced a net static welfare gain conservatively estimated to have been 0.17 per cent of GDP.

Analisis Pengaruh Implementasi AANZFTA terhadap Kreasi dan Diversi Perdagangan Impor Daging Sapi di Indonesia

The ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) represents an economic integration among ASEAN, Australia, and New Zealand. Within the AANZFTA framework, a commitment was made to reduce beef import tariff barriers. This reduction in beef import tariffs has the potential to impact Indonesia as a net importer of beef. Beef imports from AANZFTA member countries gain a competitive advantage due to reduced import tariffs, unlike beef imported from non-AANZFTA member countries. Hence, this research aims to: (1) Analyze the influencing factors on beef imports in Indonesia from 2005 to 2020, and (2) Assess the impact of AANZFTA implementation on the creation and redirection of Indonesia’s beef imports. The study involves comparing the volume and value of Indonesian beef imports from AANZFTA member countries (Australia, New Zealand, and Singapore) and non-member countries (United States, India, Japan, and Spain) during the 2005-2020 period. The analytical method employed is panel data regression analysis using a gravity model. The research findings indicate: (1) Beef imports in Indonesia between 2005 and 2020 were influenced by various factors including Indonesia’s beef production, real exchange rate, real GDP per capita of Indonesia, real GDP per capita of exporting countries, trade creation dummy, and trade diversion dummy; (2) AANZFTA implementation resulted in a 2,97% reduction in Indonesia’s beef imports from AANZFTA member countries and a 2,39% increase in beef imports from non-AANZFTA member countries compared to the scenario without AANZFTA implementation.

Unleashing Vietnam’s Rice and Coffee Exports: Decoding The Power of Non-Tariff Measures in the CPTPP Market

Rice and coffee are vital commodities in Vietnam’s economy. Amidst the evolving dynamics of global trade, the substitution of traditional tariff barriers with non-tariff measures (NTMs) is progressively increasing, and the CPTPP market is not exempt from this trend. Using the gravity model, this study explores the factors influencing Vietnam's rice and coffee exports to the CPTPP market. The study finds that economic factors, such as GDP, have a significant impact on export values. Import tariffs hinder exports, while lower tariffs enhance competitiveness. Geographical distance affects transportation costs and export values. The impact of NTMs on exports is mixed. Vietnam's CPTPP membership offers integration opportunities, albeit gradually. The COVID-19 pandemic has negatively affected exports, highlighting vulnerability. Policy recommendations include addressing adverse NTMs, promoting favorable measures, aligning legislation with the CPTPP, enhancing quality, and researching export markets and regulations. These recommendations aim to improve export performance, mitigate shocks, and leverage trade agreement benefits for the rice and coffee sectors.

Dairy trade liberalization and child stunting: Evidence from low- and middle-income countries

Despite the well-studied nutritional benefits of dairy for child linear growth, dairy is less consumed in low- and middle-income countries (LMICs) where the prevalence of child stunting is high. Previous studies have suggested the cost of dairy as a potential barrier to increased dairy consumption in these countries. Surprisingly, little research on the association between dairy consumption and child stunting in LMICs focuses on the role of trade policies, particularly the liberalization of dairy trade. To explore this, we use representative cross-country individual data on child stunting from 2006 to 2020 and link it with country-level dairy trade data. We find that a 10% decline in dairy tariff rates reduces the risk of stunting by 7.78%. Our results are robust to a subsample analysis excluding countries which joined the WTO after 2000 and to an alternative clustering method. As a falsification test, our results show child stunting is not linked with tariffs for coffee and tea. Heterogeneity analysis indicates the associations are more pronounced for boys, children aged 3–5, and children from households with lower socioeconomic status. Although we did not find significant rural–urban differences, the associations are indeed stronger for households without cattle and for countries in Western Africa, South East Asia and Europe and Central Asia. Mechanism analysis suggests that dairy tariffs are positively correlated with milk prices, while they are negatively associated with dairy import values. Lower dairy tariffs are also found to be linked with higher probability of child dairy consumption. Our findings highlight the importance of removing tariff barriers in reducing the cost of dairy and promoting dairy consumption in LMICs. This study has implications for repurposing dairy trade policies in creating nutrition-sensitive agriculture.

Trade and economic relations between the EAEU member states and the countries of Latin America and the Caribbean at the present stage: the cases of Armenia and Kazakhstan

In the context of a changing world order, the development of regional integration processes is an important trigger for the inclusion of countries in the world economy and increasing the sustainability of national economies. Integration processes contribute to deepening of the interdependence of different countries, as well as to the expansion of the influence of world economic relations on national economic systems. At the same time, tendency towards the erosion of institutions and mechanisms of multilateral (global) trade and the formation of preferential regional and interregional trade agreements (partners in which are often not only individual countries, but also integration blocs), has become one of the characteristic features of modern international economic relations. The Eurasian Economic Union, as an international organization for regional economic integration, makes efforts to expand geographical boundaries of foreign economic ties, with the aim of developing relations with the economic integration groupings and individual countries throughout the world. With the same purpose EAEU member states pay attention to the development of relations with the region of Latin America and the Caribbean (LAC), considering regional countries as promising partners for mutually beneficial cooperation. This article is devoted to the study of trade relations between the countries of the EAEU and Latin America. Special attention is paid to the trade and economic relations of Armenia and Kazakhstan with Latin American countries. The choice of these two states is not accidental, since they are relatively active in the Latin American direction and complement the policy of the Russian Federation aimed at deepening cooperation with the LAC. The author concludes that these countries have the potential for further development of trade and economic relations, the implementation of which requires overcoming, first of all, logistical obstacles and tariff barriers.

Solution to Overcome Import Tariff Barriers for Vietnamese Goods Exported to the European Union Market

The research aims to propose solutions for overcoming non-tariff barriers in the export of Vietnamese goods to the European Union (EU) market. The study identifies common characteristics within the bloc, using data collected from 2015 to 2022. Various methods such as statistical analysis, balance analysis, interpretation, deduction, synthesis analysis, logic methods, and forecasting were employed. Based on the research findings, the author suggests several groups of solutions to address non-tariff barriers when exporting goods to the EU market: Government-related solutions (Enhancing information dissemination, promoting EU trade laws and policies; Proactively addressing anti-dumping barriers); Association-related solutions (Improving information collection and processing capabilities; Willingness to litigate and counter-litigate); Legal consulting organizations' solutions; Business-related solutions; Solutions for the seafood industry; Solutions for the footwear industry; Solutions for the textile and garment industry.

Deliberate Surrender? The Impact of Interwar Indian Protection

Abstract What is the role of trade policy in promoting intra-Empire trade? We address the question in the context of interwar India, whose trade policies have been accused of harming British export interests. We quantify the impact of trade policy on the value and composition of Indian imports, using novel disaggregated data on both trade policies and imports for 114 commodity categories coming from 42 countries. We find that, even though Indian protection lowered total imports, it substantially boosted imports from the United Kingdom. Despite the rising tariff barriers facing British exporters, trade diversion from other countries ensured that Indian trade policy benefited them overall.

The Potential Impact of Tariff Liberalisation on India’s Automobile Industry Global Value Chain Trade: Evidence From an Economy-Wide Model

The impact of tariff barriers affecting participation in global value chain (GVC) trade has received attention in recent literature. However, the empirical evidence in the context of mega-regional trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP), from which India opted out recently, remains non-existent. Our study contributes to the empirical literature by undertaking an economy-wide modelling exercise, augmenting it to the automobile sector trade in GVC goods in the Indian context. We conduct two policy simulations with an aim to analyse how India’s auto-industry and auto-parts trade, involving forward and backward linkages in GVCs, have been affected by its decision to opt out of RCEP compared to a hypothetical scenario of not doing so. Our results suggest that a potential RCEP membership would have created net trade in both the finished automobile and intermediate auto-parts sectors, although imports would exceed exports. Further, we infer that both backward linkages and forward linkages in this industry will be adversely affected by opting out of RCEP, as there is export diversion in the auto-parts sectors globally, with India facing terms of trade losses due to higher import prices. This informs policymakers that developing domestic resilience and improving productivity are critical for India to improve its long-run export competitiveness while contemplating future trade agreements, including those with RCEP members. JEL Codes: F15, F61, O53

Emerging challenges in implementing the common market protocol for free movement of goods in the East African community

This paper delves into the intricate challenges encountered by Tanzania in effectively implementing the East African Community (EAC) Common Market Protocol (CMP) pertaining to the seamless movement of goods to Kenya. The research adopts a case study design, employing qualitative and in-depth methods to gather data. The data collection process utilizes a purposeful sampling technique involving 30 participants, and thematic analysis is employed for data analysis. The findings highlight several tariff barriers that hinder the effective implementation of the EAC CMP, including customs duties, quantitative restrictions, measures with equivalent impact to customs duties, and those with equivalent impact to quantitative restrictions. Furthermore, the study uncovers non-tariff barriers (NTBs) that impede the free movement of goods from Tanzania to Kenya, such as political barriers, high transportation costs, food insecurity, discrepancies in standards, limited logistics and trade services, and restricted access to finance. The study concludes that the EAC Partner States bear the responsibility of eliminating existing tariff and non-tariff restrictions that obstruct trade, as well as refraining from imposing new ones. This research significantly contributes to our understanding of the economic integration within the EAC by shedding light on the novel challenges encountered in the implementation of the CMP concerning the free movement of goods.

Optimal responses of multinational firms towards non-tariff or tariff barrier: Onshore versus offshore manufacturing

Trade barriers are typically provided by emerging economies to impede multinational firms (MNFs) and safeguard their small and medium-sized local firms. So far, it is still unclear how MNFs modify their manufacturing strategies to better manage trade barriers. As a result, this paper systematically examines how MNFs respond to various trade barriers including non-tariff and tariff barriers, where both onshore (ONM) and offshore (OFM) manufacturing are feasible. Three important and intriguing findings of this research can be distilled via the definition of the relative market size. (1) Under ONM, trade barriers do undoubtedly aid in the growth of local firms in emerging economics, and the relative market size can have an impact on the MNF’s marketing strategy. Also, the MNF exhibits a bargaining effect when the relative market size is bigger, meaning that trade barriers will not result in a decline in the MNF’s operational performance. (2) Under either of trade barriers, the MNF can base on the relative market size to select OFM or ONM. That is, when the relative market size is sufficient, the MNF prefers to use ONM to guarantee a stable supply process even while facing trade barriers; otherwise, the MNF is advised to adopt OFM to avoid trade barriers and occupy greater product shares in the emerging market. (3) Regarding emerging economics, trade barriers are advised to be implemented if their local enterprises are not sufficiently developed. And as their local firms become more reliable, trade barriers are ineffective to restraint the MNF since the MNF is willing to shift its production base.

U.S. Economic Diplomacy towards Japan in Resolving Beef Tariff Barriers

The United States (US) is one of beef exporting countries in Japan. The high level of demand for beef in Japan was followed by a decrease in the volume of US beef from Japan during 2017-2020 period caused by import barriers in the form of tariffs faced by US beef. These tariff barriers arise because the US does not have a trade agreement with Japan. This study aims to discuss the efforts made by the US through negotiating tariff barriers with Japan regarding beef exports. This study uses the concepts of economic diplomacy and trade theory as the basis for research analysis. The research method used in this research is descriptive qualitative with data collection through documentation study. The results of this study indicate that the US effort in negotiating tariff barriers with Japan is to form a bilateral trade agreement, namely the US-Japan Trade Agreement (USJTA) which uses the stages of decision-making in economic diplomacy in its formation. Through this effort, the US successfully lowered its beef import tariffs in Japan and leveled its beef competitive level with the CPTPP member countries. In the formation of the USJTA, various actors are involved, both state and non-state actors. Efforts to negotiate tariff barriers on beef exports by the US and Japan succeeded in increasing US beef exports after the establishment of the USJTA began to be implemented on January 1, 2020.
 Keywords: economic diplomacy, export, tariff barriers, United States