Non-tariff and overall protection: evidence across countries and over time

Abstract

This paper analyzes the evolution of the incidence and intensity of nontariff measures (NTMs). It extends earlier work by measuring protection from NTMs over time from a newly available database and provides evidence on the evolution of NTMs. In particular, building on Kee et al. (Econ J 119(534):172-199, 2009), this paper estimates the ad valorem equivalents of NTMs for 97 countries at the product level over the period 1997-2015. We show that the incidence and the intensity of NTMs were both increasing over this period, with NTMs becoming an even more dominant source of trade protection. We are also able to investigate the evolution of overall protection derived jointly from tariffs and NTMs. The results show that the overall protection level, for most countries and products, has not decreased despite the fall in tariffs associated with multilateral, regional and bilateral trade agreements in recent decades. We also document an increase in overall trade protection during the recent 2008 financial crisis. Overall, this study sheds light on an underresearched aspect of trade liberalization: the proliferation and increase of NTMs.

Protectionism, state discrimination, and international business since the onset of the Global Financial Crisis

“…The mistake is to associate protectionism with one type of international commerce (trade in goods), with one direction of such commerce (imports), and with one form of policy instrument (tariffs). The well-known tendency of governments to substitute among policy instruments that favor local firms (confirmed recently by Niu, Liu, Gunessee, & Milner, 2018) is yet another reason why a form-based definition of protectionism is unattractive. A preferable alternative approach is to ask what all unilateral actions by governments that favor local interests have in common.…”

“…The reasons for the 1 November 2008 start date are explained later. 4 See, however, the recent analysis of by Niu et al (2018). They show that although average tariff rates have fallen, there has been a sharp increase in the number of non-tariff measures and their restrictiveness, principally in technical barriers to trade (safety standards for manufactured goods) and sanitary and phytosanitary standards (safety standards for food, animals, and plants).…”

Trade protection and the role of non-tariff barriers

“…They find that on average, NTBs contribute almost as much to trade restrictions as tariffs. According to Niu et al (2017), even though tariffs have generally fallen between 1997 and 2015, the increase in the use of NTBs has meant that the overall level of protection for countries and products has not decreased. Hoekman and Nicita (2011) find that on average trade decreases more strongly if NTBs are implemented rather than tariffs.…”

Are nontariff measures and tariffs substitutes? Some panel data evidence

“…The effectively applied tariff rate is used to measure tariffs using the data obtained from the UNCTAD's TRAINS database at the HS 6‐digit product level . Further information on AVEs is given in Niu et al () and the detailed product level estimated AVEs at the product level for all countries and products is available at http://www.nottingham.ac.uk/gep/links/index (with full data available upon reasonable request).…”