Non-tariff measures can significantly increase trade costs and distort trade flows.
This study uses the GTAP model to assess the impact of reducing compliance costs associated with border non-tariff measures on trade and other economic indicators.
The purpose of this paper is to present some illustrative statistics on border non-tariff measures, introduce the new GTAP 11 Satellite Database, which provides ad-valorem equivalents for border measures, and demonstrate how it can be applied in the GTAP model to assess the general equilibrium effects of cost reductions.
Although the GTAP simulations are not directly linked to specific policy actions, this research provides valuable insights into how reducing border non-tariff measure costs could enhance trade flows and promote regional integration strategies.
The paper is organized as follows.
- Section 2 discusses border NTM, their use and incidence, and provides some estimates on their ad-valorem equivalents based on the existing literature.
- Section 3 illustrates a set of scenarios using the GTAP model where NTMs at the border are reduced and compares the effects with those originating from tariff reductions.
- Section 4 concludes.
The findings, interpretations and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the United Nations or its officials or Member States. The designations employed and the presentation of material on any map in this work do not imply the expression of any opinion whatsoever on the part of the United Nations concerning the legal status of any country, territory, city, or area or of its authorities, or concerning the delimitation of its frontiers and boundaries. This paper has not been formally edited.
