We use cookies on this website to give you a better user experience. By continuing to browse the site, you are agreeing to our use of cookies. Learn more

Divergence in Non-Tariff Measures and the Quality of Traded Products

Divergence in Non-Tariff Measures and the Quality of Traded Products
9 May 2023
Trade, NTM, non-tariff measures

Print Article:

Non-tariff measures (NTMs) constitute a grey area where trade policy meets public policy goals. NTMs comprise a diverse set of regulatory policy measures, including testing and certification, rather than traditional international trade policy measures such as tariffs or tariff-rate quotas. Regulatory NTMs protect plants, animals, humans, and consumers from imported harmful products containing diseases; regulate the use of hazardous substances in production; ensure conformity with common standards; and protect the environment. Trade literature has focused on the impact of NTMs on trade flows, whereas few studies address the potential welfare-improving effects of these measures. This paper fills this gap by examining the relationship between NTM applications and the quality of traded products. Two questions are addressed. First, do more or additional burdens of NTMs in the foreign market incur a higher quality of exported products? Second, is the quality impact of NTMs in different sectors different between food and other manufacturing goods? We adopt a recently developed indicator to capture the additional requirements for exporters stemming from importers’ imposition of NTMs, and a quality estimator that controls for price. Our empirical results indicate that, overall, divergence in sanitary and phytosanitary (SPS) measures between the two trading partners reduces the quality of traded goods. Furthermore, while the divergence in SPS measures reduces the quality of traded goods in the manufacturing sector, the divergence in technical barriers to trade shows no statistically significant impact on the quality of traded goods between the two trading partners. The results imply that additional costs from technical barriers to trade are negligible compared with those from SPS measures in the manufacturing sector.

Divergence in Non-Tariff Measures and the Quality of Traded Products

Search ERIA.org

Latest Multimedia

Indonesia's ASEAN Chairmanship 2023 High-Level Policy Dialogue: ASEAN Digital Community 2045

ERIA Knowledge Lab Discusses Scaling Up Innovation and Digital Technology Ecosystem

Is ASEAN Ready for Electric Vehicles? | ASEAN Insights Podcast

Related Articles

non-tariff measures
5 October 2020
Editor(s)/Author(s): Denise Penello Rial, Muhammad Rizqy Anandhika, Ernawati Munadi, Mingcong Li, Miaojie Yu, Rael Sarmeen, Kaoru Nabeshima, Ayako Obashi, Mike Webb, Anna Strutt, Korea Institute for International Economic Policy
Non-Tariff Measures (NTMs) are the new frontier for regional integration and market access, as tariffs have been continuously decreasing. NTMs are[...]
industry and manufacturing, Macroeconomy
30 April 2016
Editor(s)/Author(s): Lili Yan Ing, Santiago Fernandez de Cordoba, Olivier Cadot, Lili Yan Ing, Santiago Fernandez de Cordoba, Shujiro Urata, Ralf Peters, Oliver Cadot, Muhammad Rizqy Anandhika, Chi Le Ngo, Denise Penello-Rial, Fabien Dumesnil, Mazim Gubarev, Michelle Kristy Ayu, Christina Ruth Elisabeth, Chap Sotharith, Anika Widiana, Ermawati Munadi, Amphaphone Sayasenh, Evelyn S. Devadason, VGR CHandran, Tang Tuck Cheong, Cho Cho Thein, Zin ZIn Naing, Loreli C. de Dios, Paul Feliciano, Hank Lim, Bernard Aw, Chedtha Intaravitak, Vo Tri Thanh, Nguyen Anh Duong, Tran Binh Minh
 While tariffs have been reduced, the number of non-tariff measures (NTMs) continues to increase, and is often blamed as one source[...]