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Non Tariff Measure

  • Date Submitted: 08/16/2011 01:21 PM
  • Flesch-Kincaid Score: 36.2 
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Nontariff barriers (NTBs) refer to the wide range of policy interventions other than
border tariffs that affect trade of goods, services, and factors of production. Most
taxonomies of NTBs include market-specific trade and domestic policies affecting trade
in that market. Extended taxonomies include macro-economic policies affecting trade.
NTBs have gained importance as tariff levels have been reduced worldwide. Common
measures of NTBs include tariff-equivalents of the NTB policy or policies and count and
frequency measures of NTBs. These NTB measures are subsequently used in various
trade models, including gravity equations, to assess trade and/or welfare effects of the
measured NTBs.

The term “non-tariff measures” is defined to include export restraints and production and export subsidies, or measures with similar effect, not just import restraints (Bora et al. 2002). Non-tariff measures are commonly referred as “non-tariff barriers” or “distortions”. Baldwin (1970) defined “non-tariff distortion” as “any measure (public or private) that causes internationally traded goods and services, or resources devoted to the production of these goods and services, to be allocated in such a way as to reduce potential real world income.”
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A comprehensive examination of issues related to the measurement of NTBs is available in Deardoff and Stern (1998). Bora et al. (2002) reviewed various approaches to measure and quantify NTMs within the context of the existing data collections. It has defined and classified NTMs and looked at the effects of NTMs and how to compute those effects. Other useful studies are Baldwin (1970), Corden (1971), Laird and Yeats (1990), Feenstra (1988), Vousden (1990) and Helpman and Krugman (1989). Beghin and Bureau (2001) presented promising methodologies for modeling and quantifying NTBs to trade in agricultural and food sectors. Other studies concentrated on measuring NTBs in agricultural trade include Krueger, Schiff and Valdes...

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