Micro-analysis of the trade effects of Non-Tariff Measures

Most existing evidence on the impact of non-tariff measures (NTMs) on trade flows is based on sector level observations. However, a precise understanding of their impact would require more disaggregated information that is at the firm level. For instance, working with firm level data allows identify heterogeneous patterns of NTMs effects on production and trade flows. Ideally the all universe of firms should be included in the empirical analysis. In this context it would be possible to identify the effects of any measure on all trade margins. In practice, the most accessible data are trade data as collected by customs. This implies that only firms which have been able to reach some foreign market can be considered. This creates a de facto selection bias and limits the scope of the empirical set up. Nonetheless this is still an important first step in a more detailed assessment of NTMs effects. This Chapter discusses the details of such assessment exercises and reviews the existing empirical results. Based on real firm level export data some practical assessment is also included.

Sustainable Development Goals:

Reduced Inequalities

Responsible Consumption and Production

Partnerships for the Goals