Specific Trade Concerns and Technical Barriers to Trade: evidence from a new database

Malo Beguin

No 2022023, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: Increasingly present at the WTO, Specific Trade Concerns (STCs) on Technical Barriers to Trade (TBTs) are assumed to signal the most stringent TBTs in terms of trade costs. Lacking information in the only available WTO STC database, the previous literature relies on the assumption that the raised dates at the WTO effectively proxy the trade shock. Building an updated WTO STC database, we examine two potential endogeneity issues when using raised dates. First, a third of all STCs are raised a long time before or after the TBT is in force. Second, a TBT reducing trade increases the willingness to complain at the WTO and complaints impact trade in return. As a result, it creates a bias when using only raised dates to measure the trade shock of a TBT STC. We create a 1:1 match of STCs with respective TBTs which includes notification and enforcement dates. Then, we also examine the role of timings when complaining at the WTO. Complaining before or after the in force date is not equivalent and discards the initial hypothesis that STC are the most restrictive TBTs. In line with Ghodsi et al. (2017), we show that TBT STCs increase trade levels at the mean. Also, raised dates are accurate to measure TBT impacts on trade in the manufacturing sector, but not in agriculture and in many specific industries inside the manufacturing, mining and energy, and services broad sectors. Finally, we find that agriculture is only impacted by STCs when raised before the respective TBT enter into force. It confirms the need to reassess the use of TBT STC in the literature.

Keywords: Specific Trade Concerns; Technical Trade Barriers; Gravity; WTO (search for similar items in EconPapers)
JEL-codes: F13 P48 (search for similar items in EconPapers)
Date: 2022-10-25
New Economics Papers: this item is included in nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2022023

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