Non-tariff Measures: What’s Tariffs Got to Do with It?

David Kuenzel

No 2020-006, Wesleyan Economics Working Papers from Wesleyan University, Department of Economics

Abstract: After successive rounds of tariff reductions by GATT/WTO members, non-tariff measures (NTMs) have increasingly become the focal point of multilateral trade negotiations. It remains an open question whether the liberalization in tariff rates has subsequently been weakened or even erased by increases in NTMs. Using a product-level global panel of WTO members over the period 1996-2018, this paper systematically examines the empirical relevance of various tariff measures for the imposition of NTMs. I find that bound or applied tariff reductions on their own have not much of an impact on NTM incidence. The relevant trade policy margin for detecting a tariff-NTM nexus is instead tariff overhangs, the difference between WTO members’ bound and applied tariff rates. Countries impose more NTMs when their sectoral applied tariffs are close to their respective bound rates, indicating that small tariff overhangs signal limited legal trade policy flexibility.

Keywords: GATT/WTO; Non-tariff Measures; Tariff Overhangs; Tariffs (search for similar items in EconPapers)
JEL-codes: F13 F14 F53 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2020-12
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Non‐tariff measures: What's tariffs got to do with it? (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:wes:weswpa:2020-006

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