TARIFF EQUIVALENT AND FORGONE TRADE EFFECTS OF PROHIBITIVE TECHNICAL BARRIERS TO TRADE

Chengyan Yue and John Beghin ()

Chapter 8 in Nontariff Measures and International Trade, 2017, pp 139-150 from World Scientific Publishing Co. Pte. Ltd.

Abstract: We derive a method to econometrically estimate the tariff equivalent and forgone trade effects of a prohibitive technical barrier to trade (TBT) based on Wales and Woodland’s Kuhn-Thcker approach to corner solutions in consumer choice. The method overcomes the lack of observed data on bilateral trade flows and accounts for differentiated goods by place of origin. We apply the derived random utility model to international trade in apples to identify the tariff equivalent of prohibitive phytosanitary barriers imposed by Australia on potential imports of New Zealand apples. We estimate the forgone apple trade between the two countries, the implied trade injury imposed by Australia on New Zealand, and the welfare loss to Australia. The removal of the Australian policy would induce net welfare gains around US$50 million annually for Australia.

Keywords: Nontariff Measures; Standards; Barrier; NTM; NTB; Technical Barrier; TBT; International Trade; Phytosanitary; SPS; Maximum Residue Limits; MRL; Food Trade (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 2017
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Related works:
Journal Article: Tariff Equivalent and Forgone Trade Effects of Prohibitive Technical Barriers to Trade (2009)
Working Paper: The Tariff Equivalent and Forgone Trade Effects of Prohibitive Technical Barriers to Trade (2007)
Working Paper: The Tariff Equivalent and Forgone Trade Effects of Prohibitive Technical Barriers to Trade (2007)
Working Paper: The Tariff Equivalent and Forgone Trade Effects of Prohibitive Technical Barriers to Trade (2007)
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