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Quantifying the trade impact of non-tariff measures: Econometric and CGE Analysis

This thesis focuses on the impact of non-tariff measures (NTMs) on merchandise trade. NTMs are broadly defined as policy measures, other than tariffs, which may have an impact on international trade in goods and services. This is an area of emerging importance, for both researchers and policy makers. My research involves three main contributions. I propose new approaches to econometrically estimating the effect of NTMs. In addition, I take novel approaches to modelling these effects in a computable equilibrium (CGE) framework. In order to utilise these econometric and CGE techniques to contribute to an improved understanding on the impacts of NTMs it was necessary for me to gather new data on New Zealand NTMs, which were contributed to an international collaborative project coordinated by the United Nations Conference on Trade and Development (UNCTAD). This thesis comprises four applications. The first (chapter two) focuses on an examination of the effect of animal diseases on beef trade; NTMs are frequently applied to protect importers from diseases. The remaining three applications (chapters three, four and five) draw on the new UNCTAD NTM database, to which I contributed New Zealand data; my data contribution was significant covering 3,096 measures from 530 regulations. Chapter three is an econometric application drawing on these new data, while chapters four and five combine econometric and CGE analysis. The first application focuses on the impact of foot and mouth disease (FMD) and bovine spongiform encephalopathy (BSE) on beef trade. I find that during and after a FMD outbreak, exporting countries substitute away from markets recognised as FMD-free toward lower value markets not recognised as FMD-free. Similarly, a country that has experienced BSE will export less to markets that have not experienced BSE and more to markets that have. Regaining official recognition of FMD-free status may aid recovery but does not negate the effects of a recent FMD outbreak. The second application uses data from the UNCTAD NTM database for four developed markets. I apply a novel parsimonious regression approach which shows that NTMs that impose a conformity requirement, i.e. testing, certification or inspection, will reduce the number of countries exporting to these markets. The third application uses data that I collected on the geographical restrictions imposed by New Zealand. These restrictions mean that plant products presenting a biosecurity risk cannot be imported unless the exporting country is covered by an import health standard for that particular commodity. Using the Global Trade Analysis Project (GTAP) model, I find that if, in a counterfactual scenario, all countries were able to export all fruit and vegetable products to New Zealand, imports from Europe, Latin America, Middle East and Africa and East Asia would increase at the expense of imports from Australia, Oceania, South East Asia, South Asia and North America. The fourth application models the impact of NTMs on supply chains, with a focus on exports to major ASEAN countries. I first use the detailed UNCTAD NTM database to obtain econometric estimates of the effect of different types of NTMs on imports into major ASEAN countries, using a gravity model framework. I then use these econometric estimates in an extended version of the GTAP model to examine the impact of eliminating the types of NTMs that are found to have significant negative effects on trade. My research illustrates the benefits, both to the major ASEAN countries themselves and to their exporting partners, from the partial liberalisation by ASEAN countries of their most trade distorting types of NTMs.
Type of thesis
Webb, M. (2018). Quantifying the trade impact of non-tariff measures: Econometric and CGE Analysis (Thesis, Doctor of Philosophy (PhD)). The University of Waikato, Hamilton, New Zealand. Retrieved from https://hdl.handle.net/10289/12047
The University of Waikato
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