Analytical approaches to quantifying economic effects of non-tariff measures

ABSTRACT: While it is increasingly suspected that non-tariff measures (NTMs) may now have a greater impact on world trade than on tariffs, the economic analysis available to policymakers continues to focus on tariff reductions. This paper discusses reasons for this “analysis gap ” and describes the current state of knowledge in the hope of promoting better dialogue between the producers and users of analysis. The role of economic analysts is different than policymakers. The quantification of NTMs is inherently more difficult than that of tariffs. In some cases, it is useful to proceed by analogy and attempt to obtain “tariff equivalents ” of NTMs, in other cases this is less useful or productive. The existence of multiple NTMs on a single product further complicates the analysis. The necessity for detailed institutional and market information causes estimates of the effects of NTMs to be “handcrafted ” rather than mass-produced in the way estimates of tariff effects are. The views expressed in this paper are solely those of the author, and do not represent th