The Effects of Non-Tariff Measures on Prices, Trade, and Welfare: CGE Implementation of Policy-Based Price Comparisons

30 Pages Posted: 31 May 2004

See all articles by Soamiely Andriamananjara

Soamiely Andriamananjara

World Bank - World Bank Institute (WBI)

Judith M. Dean

Brandeis University

Michael J. Ferrantino

Trade Policy Research Forum

Robert M. Feinberg

American University - Department of Economics

Rodney D. Ludema

Georgetown University - Department of Economics

Marinos E. Tsigas

Independent

Date Written: April 2004

Abstract

The global economic effects of eliminating certain significant categories of non-tariff measures (NTMs) are estimated in a CGE context. As a first step, a database of institutional information identifying alleged instances of NTMs for particular products and countries is constructed based on WTO, U.S. Government, and EU sources, and compared with the UNCTAD policy inventory. This database is then concorded to a GTAP-feasible multiregion, multisector aggregation. Retail price data from the EIU CityData database, similarly concorded, are analyzed econometrically, taking into account systematic deviations from purchasing-power parity, to determine whether and to what extent the presence of alleged NTMs is associated with significantly higher prices. The estimated price effects are then used to calibrate a CGE simulation in order to obtain simulation estimates of trade and welfare effects of their removal, which can be disaggregated. Removal of the categories of NTMs under consideration yields global gains on the order of $90 billion. These gains arise notably from liberalization by Japan and the European Union by region, and from liberalization of apparel and machinery/equipment by sector.

Keywords: Non-tariff measures

JEL Classification: F14

Suggested Citation

Andriamananjara, Soamiely and Dean, Judith M. and Ferrantino, Michael J. and Feinberg, Robert M. and Ludema, Rodney D. and Tsigas, Marinos E., The Effects of Non-Tariff Measures on Prices, Trade, and Welfare: CGE Implementation of Policy-Based Price Comparisons (April 2004). Available at SSRN: https://ssrn.com/abstract=539705 or http://dx.doi.org/10.2139/ssrn.539705

Soamiely Andriamananjara

World Bank - World Bank Institute (WBI) ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202 458 0284 (Phone)

Judith M. Dean

Brandeis University ( email )

Waltham, MA 02454
United States

Michael J. Ferrantino (Contact Author)

Trade Policy Research Forum ( email )

13 Yucca Drive
Fredericksburg, VA Virginia 22405
United States

Robert M. Feinberg

American University - Department of Economics ( email )

4400 Massachusetts Avenue, N.W.
Washington, DC 20016-8029
United States
202-885-3770 (Phone)
202-885-3790 (Fax)

Rodney D. Ludema

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States
202-687-1429 (Phone)
202-687-6102 (Fax)

Marinos E. Tsigas

Independent ( email )