CEPII, Recherche et Expertise sur l'economie mondiale
NTMs, Preferential Trade Agreements, and Prices: New evidence

Olivier Cadot
Julien Gourdon

 Points clés :
  • Combining Trade Unit Values from CEPII with a new database on non-tariff measures and the existence of provisions on standards in PTA we provide new evidence on NTMs. NTMs increase trade unit values in half of the product lines, by 8 to 10 percent on average.
  • However, we also find that, in Preferential Trade Agreements (PTA) with deep-integration clauses, harmonization and mutual recognition of standards or conformity assessment substantially reduce the price-raising effect by 20 to 25 percent.
  • This suggests that the compliance-cost component of the price rise is reduced by “deep integration” clauses and transparency provisions in PTAs.

 Résumé :
Combining for the first time a new dataset of non-tariff measures (NTMs) in 65 countries with the CEPII’s unit values database, we estimate average ad-valorem equivalents (AVEs) for SPS, TBT and other measures by section of the Harmonized System of product classification. While most existing AVEs are obtained from indirect quantity-based estimation, ours are obtained from direct price-gap estimation. They lie in a single-digit range, i.e. substantially lower than previous estimates based on older data. Our results may reflect the progressive phasing out of commandand- control instruments such as quantitative restrictions in many countries; they also suggest that sanitary and technical regulations have not substituted for them as trade-restrictive interventions. Most interestingly, we show that deep-integration clauses in regional trade agreements, in particular the mutual recognition of conformity-assessment procedures, substantially reduce the price-raising effect of NTMs, possibly reflecting lower compliance costs.

 Mots-clés : NTMs | price gaps | RTAs | deep integration | harmonization | unit values

 JEL : F13, F15
CEPII Working Paper
N°2015-01, February 2015

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 Domaines d'expertise

Commerce & Mondialisation