The Rising Importance of Non-tariff Measures and their use in Free Trade Agreements Impact Assessments

Monica Hernandez

No 19-03, GDAE Working Papers from GDAE, Tufts University

Abstract: This research examines non-tariff measures (NTMs) and their use in impact assessments of free trade agreements (FTAs) based on computable general equilibrium models (CGE) as well as its implications. We show that projected gains related to FTAs tend to rely on removing ‘actionable’ NTMs and that, usually, impact assessments and empirical studies that provide this recommendation lack case-specific explanations behind actionability as well as of the channels and the way NTM elimination is supposed to improve welfare. We also find that the estimated economic gains from FTAs based on CGE models tend to be small and based on a high percentage of NTM elimination, which underestimates the social significance of these measures. Since NTMs comprise measures that target not only economic aspects but also social and environmental ones, indiscriminate NTM elimination suggests that small gains may come at a high cost.

Date: 2019-06
New Economics Papers: this item is included in nep-int
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