The trade effect of non-tariff measures in a high-quality trade agreement

Kazunobu Hayakawa, Juthathip Jongwanich and Archanun Kohpaiboon

No 871, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: The aim of this study is to quantify the trade effects of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is considered to be a high-quality trade agreeme nt. To this end, we estimate the gravity equation for worldwide trade and introduce applied tariffs i nto this equation to differentiate between the trade effects of tariff reduction and non-tariff measur e (NTM) changes. Our gravity equation results indicate that the trade effect of NTM changes under t he CPTPP is insignificant on average and negative for most products. We also estimate the gravity equatio n for foreign direct investment (FDI) and find some evidence that the CPTPP increased FDI by a statistic ally significant amount. Thus, the NTM changes in the CPTPP may increase FDI, rather than trade, a mong member countries.

Keywords: CPTPP; Trade; Non-tariff measures (search for similar items in EconPapers)
JEL-codes: F15 F53 (search for similar items in EconPapers)
Date: 2022-10
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 871. 2022-10

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