Trade fraud and non-tariff measures

Hiau Looi Kee and Alessandro Nicita

Journal of International Economics, 2022, vol. 139, issue C

Abstract: Similar to tariffs, non-tariff measures (NTMs) may induce trade fraud when they are restrictive. This paper examines whether discrepancies observed in the official trade statistics of importing and exporting countries are partly due to trade fraud from evading border NTMs. To capture the restrictiveness of NTMs, this paper estimates the ad valorem equivalent (AVE) with importer-exporter-product variations. This paper presents a theoretical model and empirical evidence showing that discrepancies increase with AVEs, consistent with the trade fraud due to traders intentionally misdeclaring countries of origin or misclassify products in order to evade border NTMs. The results are driven by homogeneous products and the trade between developed and developing countries.

Keywords: Trade discrepancies; Non-tariff measures; Ad valorem equivalent of NTMs; Tariff evasion; Trade fraud (search for similar items in EconPapers)
JEL-codes: F10 F14 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:139:y:2022:i:c:s0022199622001143

DOI: 10.1016/j.jinteco.2022.103682

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