Technical Barriers To Trade Research Articles

한국의 대외 수출에 미치는 TBT와 미통보 기술 규제의 영향분석: 중력모형과 PPML 방법론을 통한 접근

This study investigates the impact of Technical Barriers to Trade (TBT) and unnotified technologies on South Korea’s foreign exports, analyzing the background and objectives. With the expansion of regional economic blocks such as FTAs, the EU, and NAFTA, the scope of non-tariff barriers, including TBT and Sanitary and Phytosanitary (SPS) measures, has broadened. These non-tariff barriers, often implemented for safety purposes like environmental protection, can increase shipping and compliance costs, imposing a burden on domestic industries. The main objective of this study is to quantitatively evaluate the effects of TBT and unnotified technologies on South Korea's exports across various industries from 1995 to 2022. To achieve this, we employ the gravity model, one of the most widely used models in explaining trade conflicts, alongside the Poisson Pseudo Maximum Likelihood (PPML) method, which is suitable for handling the complexities of trade data with zero trade flows. This approach enables a detailed analysis of the impact of TBT and unnotified technologies on export performance, disaggregated by objective and industry. The results reveal that while TBT has a positive effect in promoting exports, unnotified technologies have a negative impact. These findings highlight the importance of distinguishing between the two in international trade negotiations.

A Prospective Study on the Economic Effects of China-GCC FTA - Simulation and Analyses Based on GTAP Model

In the context of the "Belt and Road" initiative, this paper is based on the China-GCC FTA negotiations, and uses the Global Trade Analysis Model (GTAP) to construct six scenarios of tariff reduction in key sectors and reduction of technical barriers to trade (TBT) between China and the GCC countries, and to assess the impacts of the construction of the FTA on the economies of China and related countries. The paper shows that increased trade liberalization has a positive economic impact on the China-GCC FTA. At the same time, tariff changes in the manufacturing and oil and gas industries dominated the tariff reductions, but the reduction of technical barriers to trade (TBT) has a particularly significant impact compared to tariffs. Bilateral trade will contribute more remarkably to China's continued economic growth than in the GCC countries. Reductions in trade barriers will effectively boost production demand in Chinese and GCC countries, contributing imports, exports and output, which will benefit both economies, specially, China's trade surpluses increasing particularly in various sectors.

Harmonizing innovation and regulation: The EU Artificial Intelligence Act in the international trade context

The European Union's Artificial Intelligence Act focuses on establishing harmonized rules across EU Member States so that AI systems are safe, transparent, and respectful of existing laws and fundamental rights. It introduces a risk-based regulatory approach, classifying AI applications by risk levels and imposing stringent compliance requirements on high-risk applications. The paper critically examines the Act's provisions, including its prohibitions on certain AI practices, requirements for high-risk AI systems, and mandates for transparency and human oversight. The paper examines the implications of the Act for international trade and technological regulation, particularly in the context of the World Trade Organization's Technical Barriers to Trade (TBT) Agreement. It addresses the Act's potential impact on developing countries, highlighting concerns that the Act's uniform standards could potentially exacerbate the digital divide and create barriers in global AI innovation and trade. The paper suggests incorporating flexibility and differential standards in the Act, enhancing technical assistance for developing countries, and advocating the EU's active participation in global standard-setting.

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.

Implementation of ISO 14001 Standard by World Trade Organization (WTO) Based on Technical Barriers to Trade (TBT) Agreement and Its Practices in Indonesia

Implementation of ISO 14001 Standard by World Trade Organization (WTO) Based on Technical Barriers to Trade (TBT) Agreement and Its Practices in Indonesia

Impact of technical barriers to trade measures on innovation – evidence from chinese manufacturing firms

ABSTRACT This study continues the discussion of the relationship between globalization and innovation. Unlike existing studies, this paper shifts attention to the impact of changes in the trade environment caused by Technical Barriers to Trade (TBT) measures on innovation. With Chinese Manufacturing firms’ micro panel dataset and using the number of firm patent applications as a proxy variable to measure innovation, we empirically test the effect of TBT measures on this innovation. This study further distinguishes the heterogeneous effects of the total TBT measures and highly restrictive measures among them. The main estimation results indicate that the total amount of TBT measures imposed by trading partners does not significantly affect the number of patent applications by Chinese exporting firms. However, highly restrictive TBT measures demonstrate a significant negative effect. This once again proves that not all TBT measures are harmful. In addition, we obtained more interesting results through further heterogeneity analyses.

Liberalising non‐tariff measures through regional trade agreements: The impact on multinational production

AbstractModern Regional Trade Agreements (RTAs) include, among other chapters, ones concerning sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT). Drawing on recent literature highlighting the relationship between “deep” RTAs and the global organisation of production, this paper empirically investigates whether these SPS and TBT provisions affect multinational production in the food, beverages and tobacco industry. To this end, we combine two different databases to estimate, in a panel gravity framework, both the intensive and extensive margins of multinational production. Because the extensive margin of multinational production may be persistent, a dynamic probit specification is used. Our results show that legally enforceable SPS sections in RTAs, in particular, influence multinational production, though with a rather differentiated pattern in terms of intensive and extensive margins; further, the impact changes depending on the country of origin and destination.

Assessing the impact of non-tariff measures on Sri Lankan mango exports: insights, challenges, and recommendations

IntroductionWith the increase in non-tariff measures (NTMs) in recent years, understanding their impact on trade policies and agricultural exports is of utmost importance for countries like Sri Lanka, where the proliferation of NTMs has posed substantial impediments to its mango export industry. However, studying NTMs can be challenging due to their complex nature, diverse range, and limited information availability.MethodsThis research aims to investigate the significant effect of NTMs on Sri Lankan mango exports, identify the pivotal drivers influencing mango exports, and analyze the performance of mango exports in Sri Lanka. This study utilized a panel dataset of 16 importing countries spanning the period from 2000 to 2021. The primary focus was on examining NTM-related challenges and obstacles faced by the mango export industry in Sri Lanka. The identification and quantification of these obstacles were achieved through a multifaceted approach in which assessment of NTM-related rejections, both domestic and overseas, evaluation of NTM incidences using frequency and coverage ratio measures, and the deployment of various gravity model equations to quantify the effect of NTMs were taken into consideration. Probit, Ordinary Least Square, Random Effects, and Poisson Pseudo Maximum Likelihood estimation techniques were utilized for data analysis.ResultsThe findings indicate a significant inverse correlation between the increase in the total count of NTMs and Sri Lankan mango exports if the country aims to export more mangoes to relevant markets, while Sanitary and Phytosanitary Measures (SPS), Technical Barriers to Trade (TBT), and Pre-shipment Inspection (PSI) contributed to increased mango exports. Among other explanatory variables, the GDP of both importing and exporting countries had a positive influence on Sri Lankan mango exports. Surprisingly, the distance to the importing country had no significant effect, though it shows a negative sign.DiscussionThis study provides valuable insights into the impact of NTMs on Sri Lankan mango exports. It highlights the considerable influence of NTMs on the overall fresh fruit export sector. We recommend proactively aligning internal quality testing regulations with the standards required by destination countries to promote future expansion.

‘No safe haven’: Why the GATT ‘regional exception’ does not apply to technical barriers to trade

AbstractDuring the last two decades, Preferential Trade Agreements (PTAs) have increased in quantity and broadened in scope. Far from merely reducing tariffs, they now set out a detailed discipline also on behind‐the‐border measures. Due to their trade‐restrictive potential, technical barriers to trade (TBTs) are now systematically regulated in PTAs. Since PTAs discriminate by definition, it is pivotal to understand whether their regulation of TBTs may be reconciled with the multilateral non‐discrimination obligation. Against this backdrop, this article aims to assess whether WTO‐incompatible TBT provisions in PTAs may benefit from the GATT 1994 ‘Regional Exception’, that is, Article XXIV. I will argue that, by virtue of the lex specialis principle, Article XXIV may not shield violations of the TBT Agreement. The impact of this study is two‐fold. First, it shows that Members of the World Trade Organization (WTO) must respect the Most‐Favoured Nation (MFN) clause when integrating their domestic policies. Second, using TBTs as a case study, it proposes some crucial adjustments to WTO case law, that should be considered also when deciding on the interplay between the GATT 1994 and WTO Agreements other than the TBT Agreement.

International Trade Law: A Driver of Climate Action or a Roadblock?

Abstract Much has been written about changing the world's perception of international trade—from an area of development that will accelerate climate change to a powerful tool that can drive climate action. This article elaborates on four mechanisms of international trade law developed and honed by the World Trade Organization (WTO) that can play a pivotal role in accelerating climate action. The four mechanisms are the WTO's dispute resolution system, the Agreement on Technical Barriers to Trade (TBT), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and the regional trade agreements (RTAs) negotiated under the WTO framework. Elucidating the WTO's role, this article supports the proposition that every multilateral institution can rise to the occasion and spearhead climate action in its own unique capacity.

Heterogeneous trade effects of technical non‐tariff measures: Vietnamese agricultural imports

This study investigates the impact of technical non‐tariff measures (NTMs), specifically technical barriers to trade (TBT) and sanitary and phytosanitary (SPS), of Vietnam on agricultural imports and the role of deep trade agreements. This issue has been primarily focused on advanced countries but rarely studied for developing countries. The estimates indicate that the impacts of technical NTMs on imports from least developed countries (LDCs) and non‐LDCs are heterogeneous in terms of the measures' sophistication level. Simple technical NTMs, namely labelling, marking, and packaging requirements, increase agricultural imports from LDCs, while there is no significant impact on those from non‐LDCs. Other categories of TBT and SPS NTMs impede imports from LDCs, while benefiting imports from non‐LDCs. In addition, we found that deep trade agreements can ease the burdens of technical NTMs, but this is limited to imports from non‐LDCs. The findings of this study can help policymakers in better regulating agricultural imports to prevent harmful imports with minimal impacts on the benefits from trade.

Export response to technical barriers to trade: evidence from high-tech exports of China to the United States

This study explores the impact of technical barriers to trade (TBTs) on China’s high-tech exports to the United States (US). We use the UN Comtrade database and the WTO/TBT-SPS Notification and Enquiry of China for the period 2003 to 2018 to quantify TBTs and estimate their effects. Overall, our findings support and are in line with the demand-enhancing promoting effects of TBTs on China’s high-tech exports, indicating that TBTs can act as a catalyst for quality upgrading. However, our findings also suggest the potential of a diminishing promoting effect, possibly caused by the negative impact from the newly imposed TBTs on exports. Our study highlights the need for policymakers and producers in China to carefully consider the impact of TBTs on their exports and invest in product upgrades to enhance their competitiveness in order to meet the increasing technical standards requirements of the US.

Barrier or opportunity? How trade regulations shape Colombian firms' export strategies

AbstractFirms increasingly have to contend with trade regulations to access foreign markets. We quantify their relative importance and the heterogeneous effects for Colombians firms exporting to Latin America between 2007 and 2017, focusing on specific types and channels. Using panel evidence from a firm‐level gravity model with a difference‐in‐differences identification strategy, technical barriers to trade (TBTs) and quantity control measures both decrease trade on average. Other non‐tariff measures and tariffs play a minor role. At its core, TBT and quantity measures reallocate trade from small to big firms. The same mechanism benefits firms participating in global value chains. However, quantity controls make it more likely that big firm will leave export markets to the benefit of smaller ones. Our results control for the endogeneity of trade regulations and are robust to the use of different samples and measures of firm size.

Impact of TBTs on Trade in ICT Goods: Differentiating by Regulatory Objectives

Abstract This paper analyses how different types of technical barriers to trade (TBTs) imposed on imports of information and communications technology (ICT) goods globally affected the value and volume of imported goods during the period of 1996–2018. Key words cited in the TBTs give an indication of the aims behind the imposition of TBTs. The results indicate that TBTs have a strong positive impact on the value of imports. While many key words cited in TBTs notified to the World Trade Organization (WTO) affect the value and volume of imports in a positive way, certain other TBTs function as trade barriers.

Analisis Dampak Kebijakan Non-Tarif Measures Terhadap Kinerja Ekspor Udang Beku Indonesia di Pasar Tujuan Utama

The shrimp commodity significantly contributes to the total export value of the fisheries sub-sector in Indonesia. In 2021, Indonesia will become the fourth largest exporter of frozen shrimp on the world market. However, the value of Indonesia's frozen shrimp exports continues to fluctuate every year. Indonesia's frozen shrimp exports also face various challenges from non-tariff measures (NTM) policies, incredibly sanitary and phytosanitary (SPS) and technical barriers to trade (TBT) imposed by importing countries. This study aims to analyze the performance of Indonesia's frozen shrimp trade in destination markets and the impact of NTM policies and other factors on Indonesian shrimp exports in destination markets. This research uses panel data model regression. The results showed there was still rejection of fishery products including frozen shrimp from Indonesia in importing countries due to excess chemical content. But the number of rejections is less than one percent compared to the total received. This is in line with the panel data regression results for the SPS variable which is not significant and the TBT variable which has a significant and positive effect. The non-significant results indicate that exporters in Indonesia can adjust the policies imposed by the importing country relating to product certification criteria, sampling procedures, packaging requirements, distribution requirements, and labeling requirements. For this reason, the Indonesian government needs to improve regarding rejection is the need for accurate and thorough sample testing of Indonesian frozen shrimp before export, as well as increasing assistance regarding threshold limits for chemical use for shrimp cultivators at the upstream level.

Trade margins of rubber exporters: The case of Indonesia

This study used a two-step system generalized method of moment (GMM) and spatial aspects to analyze Indonesia’s trade margins of a rubber product to export destination countries over the period 2009–2018. The study unraveled the role of non-tariff measures such as sanitary and phytosanitary (SPS), technical barriers to trade (TBT), and gravity factors in determining rubber trade margins. Our empirical strategies revealed that sanitary and phytosanitary policies negatively affect trade margins, while the technical barrier to trade and foreign direct investment (FDI) asserts a positive impact on trade margins. However, the economics of scale, port, and contiguity increases extensive margin and reduces intensive, population size, distance, and language barrier reduce extensive margin and increase intensive margin. Further evidence revealed that high population size and port quality accompanied by high FDI and distance increases extensive margin and reduces intensive margin. High economics of scale accompanied by distance, port quality, FDI, and population size reduces both trade margins. Our empirical strategy from the spatial analysis does not give overall significant results on each variable as only economies of scale and population size seem to have a spatial influence on trade margins. The study, therefore, recommends that innovation both in terms of technology, like industrial innovation in the field of rubber processing and certification related to rubber commodities, needs to be increased to intensify and expand Indonesia’s rubber market share.

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.

A Study on the Effect of Technical Barriers to Trade (TBT) Measures on Imports from China and Employment in Korea

Purpose - The number of Korea’s Technical Barriers to Trade (TBT) notifications is increasing, and TBT is recognized as a form of trade barrier. Furthermore, Korea is highly dependent on trade, and the proportion of imports from China is large. Therefore, this study analyzed the effect of TBT on imports from China and Korea’s employment.
 Design/Methodology/Approach - This study aimed to analyze the impact of TBT in Korea on imports and employment in China. Therefore, TBT and other data from 1995 to 2017 were collected to form panel data. A gravity model was used to analyze the import effect of TBT, and import competition was used to analyze the employment effect. A Hausman test was performed to increase the accuracy of the panel analysis.
 Findings - TBT had no effect on the import of the entire manufacturing industry and of manufacturing intermediate goods. However, as a result of analysis by detailed industry, TBT decreased the imports of electronic parts, electrical equipment, and steel industries. However, TBT had no effect on the plastics industry, and TBT rather increased the imports of the chemical industry. TBT had a positive effect on the number of employees of the manufacturing industry.
 Research Implications - While previous literature conducted in Korea mainly focused on the impact of TBT by trading partners on exports, this study focuses on imports and employment. It is expected to fill gaps in existing studies.

TBTs, firm organization and labor structure

AbstractThis article investigates the effect of shocks to the occupational structure of exporting firms induced by the introduction of technical barriers to trade (TBTs) in importing countries. We rely on specific trade concerns data to identify trade‐restrictive TBT measures, combined with matched employer‐employee data for French exporters over the period 1995–2010, and information on the product‐destinations served by each exporter. Controlling for time‐invariant firm/occupation fixed effects and for time‐varying sector/occupation shocks, the 2SLS estimates show that exporting firms adapt to the imposition of TBTs at destination by increasing the share of managers at the expense of blue collars, white collars and other professionals.

Non‐tariff measures along global value chains: evidence from ASEAN countries

This paper analyzes the effects of Non‐Tariff Measures (NTMs) on exports while considering the degree of participation in the global value chains (GVCs). Standard‐like non‐tariff measures, such as Sanitary and Phytosanitary Standards (SPS) and Technical Barriers to Trade (TBT), have influenced trade by increasing trade costs or improving consumers' awareness. Theoretically, NTMs can have either positive or negative effects on trade flows. In this study the characteristics of the production process are considered in order to disentangle the arguments of ‘standards as barriers’ and ‘standards as catalyst’. Due to the expansion of GVCs, NTMs have accumulated along production processes. Cumulative NTMs along the GVCs affect not only the direct trade sector and its partners, but also other relevant sectors and countries indirectly through the production chains. We use panel data on product‐level ASEAN exports for 2007–2019 to estimate the effects of NTMs depending on GVC participation. The estimated results show that the impact of SPS and TBT is heterogeneous according to the degree of GVC participation. While SPS and TBT regulations have been found to promote trade, their positive effects are less significant for industries involved in forward and upstream GVC participation. This reflects the characteristics of these sectors, which require higher levels of technology and skilled labour compared to backward GVC participation and downstream sectors. As a result, ASEAN exporters heavily involved in forward and upstream GVCs face increased production costs to comply with the requirements of the standard‐like NTMs. The increased production costs limit the trade‐promoting effects of the standard‐like NTMs.