Innovative modeling of non-tariff measures in trade

Client/Funding Institution

Anniversary Fund of the Oesterreichische Nationalbank

Abstract

Starting in the 1960s, non-tariff measures (NTM) have been continuously replacing tariffs as the core element of trade negotiations. The number of types of non-tariff measures and the number of countries making use of these instruments increases continuously. Therefore, many different approaches have developed recently for the evaluation of NTM and free trade agreements (FTA). Starting from models using simple dummy variables for the indication of NTM or FTA, today there is a wide range of databases available varying in content (i.e. capturing different aspects of NTM and FTA) and in applied methodologies (e.g. extracting information from legal texts, survey data, notifications to the WTO). Our contribution to the existing literature is at least threefold: First, it aims at modelling non-tariff measures in a Structural Gravity framework. Second, it assesses the value added of different data on the structure of FTA and NTM by means of evaluating their ability to predict the trade effects of the EU-South Korea Free Trade Agreement. Based on these results, the third contribution lies in the estimation of effects of the envisaged EU-Japan Economic Partnership Agreement.

Duration

September 2018 - February 2020

wiiw team Leader

Julia Grübler

wiiw Staff

Manuela Engleitner, Mahdi Ghodsi, Oliver Reiter, Robert Stehrer, David Zenz

Keywords: NTM, tariffs, trade, non-tariff measures, free trade agreements, FTA, EU-South Korea Free Trade agreement, EU-Japan Economic Partnership Agreement

Countries covered: EU-27, Japan, South Korea

Research Areas: International Trade, Competitiveness and FDI


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