Sustainable Production, Non-Tariff Measures, and Trade Performance in RCEP Countries

Muhamad Rias K. V. Zainuddin, Tamat Sarmidi and Norlin Khalid
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Muhamad Rias K. V. Zainuddin: Faculty of Business, Economics and Social Development, Universiti Malaysia Terengganu, Kuala Nerus 21030, Terengganu, Malaysia
Tamat Sarmidi: Faculty of Economics and Management, Universiti Kebangsaan Malaysia, Bangi 43600, Selangor, Malaysia
Norlin Khalid: Faculty of Economics and Management, Universiti Kebangsaan Malaysia, Bangi 43600, Selangor, Malaysia

Sustainability, 2020, vol. 12, issue 23, 1-12

Abstract: The main objective of this paper is to reinvestigate the impacts of non-tariff measures (NTMs) on bilateral exports among Regional Comprehensive Economic Partnership (RCEP) countries. The study adds to the literature in two areas. First, we calculate coverage ratios for NTMs related to specific sustainable development goals (SDGs) imposed on bilateral trade between RCEP member countries. Second, to avoid aggregation bias, the analysis covers four major sectors, namely agrifood, health, logistics, and other manufacturing. The results of a Poisson pseudo maximum likelihood (PPML) regression in a gravity model, using average import data from 2016 to 2018 at the Harmonized Commodity Description and Coding Systems (HS) two-digit level (97 subsectors), show that the effects of SDG-related NTMs vary by sector. NTMs related to SDG 3 (good health and well-being) distort trade in health but enhance trade in logistics. NTMs related to SDG 12 (responsible consumption and production) have a negative impact on logistics but a positive impact on other manufacturing exports. The findings provide new perspectives on the varying impacts of SDG-related NTMs on trade. Interestingly, the study finds that NTMs addressing SDGs 3 and 12 have positive trade impacts. Policymakers should, however, regulate NTM implementation, to minimize negative impacts and ensure that domestic firms comply to promote sustainable production.

Keywords: non-tariff measures; sustainable production; trade policy; gravity model; economic integration; RCEP (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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