Non Tariff Measures

Data day WTO 18-19 May 2009

Definition of NTM-NTB

NTM = policy measures, other than ordinary customs tariffs, that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both. Some of these measures may constitute non-tariff barriers.

NTB = Non-tariff measures that have a protectionist intent. Examples: quotas, tariff-rate quotas, licensing regimes, price bands.

Importance of NTM

NTM are prominent in restricting trade to OECD countries.

What type of NTM?

Old times: Quotas Monopolistic measures Licensing

New types: SPS TBT Antidumping

Where to find data on NTM?

UNCTAD Trains (WITS)

Antidumping (Global Antidumping Database, based on WTO notifications)

Subsidies (OECD – WB)

Existing Government Websites (EU –USDA – etc.)

Limitation of Existing Data NTM

UNCTAD data is obsolete (almost 10 years old) Old Classification (more focus on traditional NTM)

Subsidies OECD covers only OECD countries World Bank covers developing countries

National databases on NTM Only some countries have databases on NTM Separate databases within one country Different coding

… a new database on NTM

UNCTAD - MAST effort on NTM Put all NTM data in one single database. Collect, verify, standardize.

But… What kind of data is important?

For research For policy

Some Questions Research, measures overall impact of NTM:

NTM replacing tariffs? Restrictiveness? NTM can be restrictive, other may not, others may help

exporters. Which countries use NTM, in which products? What type of NTM? Impact of NTM across products from different origin (NTM affect market

access to LIC?) Do NTM create trade diversion?

Policy, feeds on overall research and then look into policy issues. Monitoring NTM uses, types and frequencies (evolution) NTM used as protectionist barriers, or are they legit? (legal) Negotiation purposes (legal) Quantify the costs of compliance

Large costs for some, small costs for others (country level, firm level) Help countries to meet the NTM requirements

Aid for trade Technical Assistance

Research Question 1 Question: How restrictive is NTM trade policy?

Impact on trade flows (overall or by product) Impact on prices

Methodology: explain trade flows with trade policy variables (Correlate different variables). Gravity models, comparative advantage models Time Series models Price gap models

NTM Data requirements Variables on the right (NTM, Determinants) must be comparable with

left hand side (Trade). That is: they must refer to the same sample. Detailed disaggregated data Panel Data (time series)

Research Question 2 Question: Impact of NTM across countries.

Trade Diversion Do exporters in country A have advantages over exporters in country B in

fulfilling NTM requirements in country C? Why country A is able to exports a product to country C but not to country D?

Due to NTM?

Methodology: cross countries analysis of trade flows. Econometric analysis. Gravity models. Product specific models.

NTM Data Requirements Bilateral data to match with bilateral trade Captures different types of NTM Needs of a standard classification across countries. Product level data

Policy question:Do NTM prevent LDC from exporting to High income countries? How can policy help to solve this problem? Use the information coming from research:

Identify if NTM are important Identify if LDC do not export as much as they could

because NTM Identify Products where problems are larger

Policy: Identify NTM applied to these products

Identify binding NTM Design Technical assistance, aid for trade

Help to resolve problems for these countries, for these products and for fulfilling these NTM

What kind of data to answers these questions? Data representative of all trade (or all imports or exports

overall, or within the sector). Comparable across countries . Starting/ending date of NTM (or any substantial change

in content). To identify impacts of NTM in time series analysis.

Detailed NTM classification is not very important for research, but it is important for policy, product level analysis.

NTM Dataset: which characteristics? Detailed product classification HS6 NTM by types Most Countries covered (especially large import

markets) Time Series (collect NTM every year as tariffs)

Implementation date of existing NTM Changes in underlining requirements (SPS TBT)

…A-priori judgment of restrictiveness of NTM? Very difficult to do, and to properly collect

Data collection trade-off:Accurateness vs Richness A priori information on restrictiveness is

important… but at what cost? Example: SPS residue limit:

Existence of a limit: yes/not (easy to collect) Compliance with international standards?

Is there an international standard? Info national standard is more/less lax than intl. May involve a lot of substances…

SPS exact residue limits (even more difficult to collect, may change often)

Example: Quotas Existence of a quota regime How large is the quota, allocation, seasonal, TRQ.

Summary:

Dataset Requirements of a NTM database: Clean: no or little measurement error Standard format: can be merged with other data Sources: official national data or representative

surveys (no sample bias).

In practice It is better to have a complete and more compact

dataset that the one flagged with accurateness problems, incomplete data, and sample bias.