Trade Restrictiveness Indices in Presence of Externalities: An Application to Non-Tariff Measures

43 Pages Posted: 10 Oct 2014

See all articles by John Beghin

John Beghin

University of Nebraska Lincoln Agricultural Economics; Iowa State University - Department of Economics

Anne-Célia Disdier

Paris School of Economics (PSE)

Stéphan Marette

National Institute for Agricultural Research (INRA) - ESR

Multiple version iconThere are 2 versions of this paper

Date Written: September 29, 2014

Abstract

We extend the trade restrictiveness index approach to the case of market imperfections and domestic regulations addressing them. We focus on standard-like non-tariff measures (NTMs) affecting cost of production and potentially enhancing demand by reducing negative externalities. We apply the framework to the database of Kee et al. (2009) and derive ad valorem equivalents (AVEs) for NTMs. About 39% of the product lines affected by NTMs exhibit negative AVEs, indicating a trade-facilitating effect of these measures. Accounting for the trade-facilitating effect of NTMs significantly reduces previous measures of countries' trade policy restrictiveness obtained while constraining these NTMs to be trade reducing.

Keywords: F13, F18, Q56

JEL Classification: non-tariff measures, externalities, ad valorem equivalents, trade restrictiveness indices

Suggested Citation

Beghin, John and Disdier, Anne-Célia and Marette, Stéphan, Trade Restrictiveness Indices in Presence of Externalities: An Application to Non-Tariff Measures (September 29, 2014). CESifo Working Paper Series No. 4968, Available at SSRN: https://ssrn.com/abstract=2506525 or http://dx.doi.org/10.2139/ssrn.2506525

John Beghin

University of Nebraska Lincoln Agricultural Economics ( email )

Lincoln, NE 68583
United States

Iowa State University - Department of Economics ( email )

383 Heady Hall
Ames, IA 50011
United States

Anne-Célia Disdier (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Stéphan Marette

National Institute for Agricultural Research (INRA) - ESR ( email )

Univeriste des Sciences Sociales
21, Allee de Brienne
Toulouse 31000
France

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