New Trade Restrictive Measures and Exports: Evidence from South Korea

Abstract

The world economy recently witnessed a surge in trade remedies and non-tariff measures (NTMs) as new trade-restrictive measures. This study attempts to provide empirical evidence on the effects of new trade-restrictive measures, such as anti- dumping, countervailing measures, technical barriers to trade, and sanitary and phytosanitary measures on trade. By using the Korean product-level export data and the new NTM data, we find that new trade-restrictive measures in trade can depend on the affected sectors and imposing countries. Exports can be adversely affected by new trade-restrictive measures in their concentrated sectors taken by importing developed countries. We also find the threatening effects of trade remedy before this investigation. However, new trade-restrictive measures imposed by importing developing countries can have positive impact on trade, particularly an increase in consumers’ trust in product quality and decrease in asymmetric information. Results imply that the government of an exporting party should enhance trade policies by considering the heterogeneous effects of new trade-restrictive measures across industries and trading partners.

Keywords: New Trade Restrictions, Non-tariff Measures (NTMs), Trade Remedy, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary Measures (SPS)

JEL Classification: F13, F14, F15