The impact of non-tariff barriers on trade and welfare

Swati Dhingra, Rebecca Freeman and Hanwei Huang

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Deep trade agreements (DTAs) are widespread and have taken the world beyond tariff liberalization in goods trade. As the importance of global supply chains and the services sector has increased across the world, shallow tariff reductions have given way to deeper commitments that address non-tariff barriers and behind-the-border barriers to trade. This paper shows that DTA commitments undertaken since the Uruguay Round have increased trade in goods and trade in services by over half in the long term. Taking reduced-form trade elasticity estimates to a general equilibrium quantitative model, DTAs contributed over 40% to the welfare gains from trade globally and even more for advanced economies. China, India and the Eastern European bloc benefited the most from trade agreements. While most of the gains in China and India came from tariff reductions, the gains to Eastern Europe came largely from deep commitments during its accession to the EU. Applying the DTA estimates to ex ante analysis of Brexit, the losses to the UK from its departure from the deepest trade agreement in the world would not be offset by new deep trade deals with key non-EU trade partners.

JEL-codes: J1 L81 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2023-01-01
New Economics Papers: this item is included in nep-cna and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Economica, 1, January, 2023, 90(357), pp. 140 - 177. ISSN: 0013-0427

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http://eprints.lse.ac.uk/117225/ Open access version. (application/pdf)

Related works:
Journal Article: The Impact of Non‐tariff Barriers on Trade and Welfare (2023)
Working Paper: The impact of non-tariff barriers on trade and welfare (2021)
Working Paper: The impact of non-tariff barriers on trade and welfare (2021)
Working Paper: The impact of non-tariff barriers on trade and welfare (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:117225

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