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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)

Abstract: 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)
New Economics Papers: this item is included in nep-int
Date: 2014-02-01
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 446. 2014-02-01

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