How do free trade agreements reduce tariff rates and non-tariff barriers?
Kazunobu Hayakawa () and
Fukunari Kimura ()
No 446, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)
This paper empirically investigates how far free trade agreements (FTAs) successfully lower tariff rates and non-tariff barriers (NTBs) for manufacturing industries by employing the bilateral tariff and NTB data in a time series for countries around the world. We find that FTAs under GATT Article XXIV and the Enabling Clause contribute to reducing tariff rates by 2.1% points and 1.5% points, respectively. In the case of NTBs, their respective impacts are 6.6% points and 5.7% points. Membership in the World Trade Organization (WTO) does not contribute greatly to reducing tariff rates but does play a significant role in reducing NTBs. These results provide important implications for the literature on numerical assessments of FTAs.
Keywords: International trade; Trade policy; Tariff; Non-tariff barriers; Free Trade Agreement (FTA) (search for similar items in EconPapers)
JEL-codes: F10 F13 F15 (search for similar items in EconPapers)
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 446. 2014-02-01
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