The Extensive Margin of Exporting Products: A Firm-Level Analysis

To quantify trade frictions, we examine multiproduct exporters. We build a flexible general-equilibrium model and estimate market entry costs using Brazilian firm-product-destination data under rich demand and market access cost shocks. Our estimates show that additional products farther from a firm’s core competency come at higher production costs, but there are substantive economies of scope in market access costs. Market access costs differ across destinations, falling more rapidly in scope at nearby regions and at destinations with fewer nontariff barriers. We evaluate a counterfactual scenario that harmonizes market access costs across destinations and find global welfare gains similar to eliminating all current tariffs. (JEL D22, F12, F13, F14, O14, O19)

Trade facilitation performance influences on ASEAN trade flows

The Association of Southeast Asian Nations (ASEAN) considers trade facilitation as a driving force in forming a single market and a single production base. This paper constructs an ASEAN scorecard for measuring the performance of trade facilitation strategic plans by ASEAN member states. Next, a structural gravity model is used in the paper in order to estimate the trade facilitation performance influence on ASEAN trade flows. The fact that the indicator of easing Nontariff Barriers (NTBs) and institutional coordination, on the one hand, and the ASEAN member states' engagement indicator, on the other, had the highest enforcement scores in ASEAN in the period 2017-2019. Those two indicators also exert the biggest influence on ASEAN trade flows, especially ASEAN extra-regional trade.

The Environmental Bias of Trade Policy*

This paper describes a new fact, then analyzes its causes and consequences: in most countries, import tariffs and nontariff barriers are substantially lower on dirty than on clean industries, where an industry’s “dirtiness” is defined as its carbon dioxide (CO2) emissions per dollar of output. This difference in trade policy creates a global implicit subsidy to CO2 emissions in internationally traded goods and so contributes to climate change. This global implicit subsidy to CO2 emissions totals several hundred billion dollars annually. The greater protection of downstream industries, which are relatively clean, substantially accounts for this pattern. The downstream pattern can be explained by theories where industries lobby for low tariffs on their inputs but final consumers are poorly organized. A quantitative general equilibrium model suggests that if countries applied similar trade policies to clean and dirty goods, global CO2 emissions would decrease and global real income would change little.

Impact of Tariffs and Nontariff Barriers on the International Trade

In the modern world economy, tariff and non-tariff barrier regulation actsas an effective regulator, promoting greater openness of the market, oras the most widespread foreign trade instrument of protectionism. Over the past decades there has been a steady decline in the rates of import customs duties. On the other hand, non-tariff measures to regulate foreign trade are being applied more and more effectively. But at the same time customs and tariff policy continues to be a key factor determining the national trade regime and the conditions for access of foreign products to the domestic market.The main purpose of this research is to assess the influence of tariffs and non-tariff barriers on international trade, asthese factors play an essential role in the international trade.The theoretical and methodological basis of the study was the work of scientists in the field of finance, state regulation of foreign economic activity and international relations. In the methodology part gravity model regression is assessed for tariff and non-tariff measures (NTMs)regulatingforeign trade flows. As result, non-tariff barriers (NTMs) such as Sanitary and Phytosanitary Standards (SPS) and Technical Barriers to trade (TBT) have had the largest negative impact.

On the relevance of gravity model in the new institutional environment

International trade enables economies to gain specific advantages of trade. Theory of international trade is anchored on several key concepts. The first is the concept of comparative advantage. The size of international trade is frequently measured with the use of the gravity model. According to this model, countries trade with each other based on the size of their GDP and population. Another motivation supporting trade is the cultural affinity, institutional support and physical proximity. Deteriorating influence on the extent of mutual trade is traditionally expressed by increased geographical distance and trade impediments. In this paper we discuss the general validity of the model, taking in consideration new communication technology and new ways of transport and quality of institutions. We also discuss the issue of barriers to trade and we especially focus on the existing non-tariff barriers that are inhibiting the trade and we investigate how they can be included in to gravity model. Key words: gravity model, globalization, impediments to trade, nontariff barriers, institutional factors

IMPACTS OF IMPORT TARIFFS AND NONTARIFF MEASURES ON INDONESIA’S TRADE PERFORMANCES OF ENVIRONMENTAL GOODS: A GRAVITY MODEL

<p><em>In 2011 leaders of Asia-Pacific Economic Cooperation (APEC) members pledged to reduce tariffs and nontariff barriers on goods and services related to environmental goods, known as APEC Environmental Goods List. In 2012 it was agreed that the member countries will reduce import tariff for the environmental goods to be maximum of 5% by 2015. The commitment is controversial since it is agreed as APEC commitment and hence nonbinding. However, since the tariffs are applied under Most Favored Nation principle, by definition the tariffs apply to all countries. This article aims at analyzing impacts of import tariffs and nontariff barriers for the environmental goods on Indonesia’s trade performances. In this study, the environmental goods include APEC Environmental Goods List and WTO Environmental Goods Core. The gravity model is used to explain variations in Indonesia’s exports and imports of 54 environmental goods to 18 trading partners. Data included in the analysis were obtained from secondary sources and were analyzed using fixed effect panel data regression. The results show that import tariffs do not affect import, while they affect export negatively. The nontariff measures affect positively to both import and export performances. Other variables, namely the gross domestic product and distance are significant and have influence as predicted by theory.</em></p><p><strong><em>JEL Classification: </em></strong><em>F10, F13, F14</em></p><strong><em>Keywords</em></strong><em>: APEC Environmental Goods List, Gravity model, Import tariffs, Nontariff barriers, Trade performance, WTO Environmental Goods Core List</em>