A Consistent, Ad-Valorem Equivalent Measure of Applied Protection Across the World: The Macmap-Hs6 Database

Abstract

MAcMap-HS6 is a database providing with a consistent, ad valorem equivalent measure of tariff duties and tariff rate quotas for 163 countries and 208 partners, at the six-digit level of the Harmonized System (5,111 products). Based on a joint effort by ITC (UNCTAD-WTO, Geneva) and CEPII (Paris) to systematically collect and harmonize the relevant information, we describe here the methodology used in MAcMap-HS6 to compute and aggregate an ad valorem equivalent of applied protection, well suited for analytical purposes (in particular computable general equilibrium analysis). Special emphasis is put in minimizing the endogeneity bias in the aggregation procedure, by making use of a weighting scheme based on groups of countries (reference groups). Structural differences in export specialization, as reflected in different unit values, are also acknowledged when computing ad valorem equivalents, and tariff rate quota rents are computed. The resulting quantitative assessment is illustrated by giving an overview of ad valorem equivalent, applied protection across the world, in terms of average as well as distribution.

Keywords: Tariff Duties, ad valorem equivalent, tariff rate quotas, aggregation method, preferential trade arrangements

JEL Classification: F13