Using supply chain analysis to examine the costs of non-tariff measures (NTMs) and the benefits of trade facilitation

Michael J. Ferrantino

No ERSD-2012-02, WTO Staff Working Papers from World Trade Organization (WTO), Economic Research and Statistics Division

Abstract: It has become increasingly common to produce goods in a number of geographically dispersed stages linked by international trade. This tendency, known by names such as production fragmentation, processing trade, and vertical specialization, has important implications for the analysis of nontariff measures (NTMs) and trade facilitation. First, different types of NTMs or trade facilitation issues are naturally associated with different stages in the movement of goods. Different price gaps can be assigned to these stages, making it possible to decompose the overall amount of distortion and to prioritize the policies with the largest potential efficiency gains. Second, NTMs may accumulate in long supply chains, implying that their trade-distorting effects are greater for goods produced in a fragmented manner than for goods with simple production processes. There is evidence that trade costs are more important for high technology goods or goods undergoing several stages of processing. Issues with product standards may be particularly important for goods with long supply chains. The link between NTMs and supply chains also has implications for economic development and for the relationship between liberalization in services and goods.

Keywords: trade costs; non-tariff measures; standards; intermediate goods (search for similar items in EconPapers)
JEL-codes: F13 F15 F29 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wtowps:ersd201202

DOI: 10.30875/8773a5b1-en

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