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GTAP Resource #3910

"Comparing gravity model specifications to estimate NTBs using the GTAP framework"
by Engelbert, Tanja, Martina Brockmeier and Beyhan De Jong

WTO Market access analyses are an important topic in general equilibrium modeling. Methods to calculate detailed tariff cuts, e.g., at the HS6 digit level, are well established and regularly used not least because of remarkable achievements like TASTE (Horridge and Laborde, 2008). In contrast, the detailed implementation of non-tariff barriers (NTBs) has yet received too little attention. This can be traced back to several reasons. Firstly, CGE modeling of WTO implementation has focused on the reduction and elimination of tariffs according to the commitments of the WTO agreements. Secondly, the effects of implemented NTBs (e.g., technical and sanitary regulations) are not always working in the same direction. The more NTBs are implemented the more difficult it gets to directly quantify their effects on trade mainly due to a lack of comprehensive data. Thirdly, currently available methods to estimate the effects of NTBs result in different outcomes which make it problematic to standardize a method and implement NTBs in CGE models.
In recent years research has concentrated on using gravity models to estimate effects of NTBs. The gravity model explains the trade volume between two countries by the exporter’s production, the importer’s consumption and the trade barriers between the two countries. Due to the deficiency of detailed information on NTBs several indirect approaches to quantify the effects of NTBs exist. One of the most commonly used approaches is the border effect approach which shows by how much international trade is different from the intra-country trade (McCallum, 1995). Controlling for all possible trade barriers such as transport costs and tariffs in the gravity equation, the border effect thus reflects the impact of NTBs on trade (Winchester, 2009). This methodology is considerably extended over time. Anderson and van Wincoop (2003) include multilateral resistance (MR) representing unobserved relative trade barriers that a country has with all o...

Resource Details (Export Citation) GTAP Keywords
Category: 2012 Conference Paper
Status: Published
By/In: Presented at the 15th Annual Conference on Global Economic Analysis, Geneva, Switzerland
Date: 2012
Created: Engelbert, T. (4/30/2012)
Updated: Engelbert, T. (6/26/2012)
Visits: 3,280
- Agricultural policies
- The GTAP Data Base and extensions

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