Non-tariff measures: a revised methodology for the quantification of bilateral trade effects of policy measures at a product level

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Overview

This is a technical paper that outlines improvements to the methodology described in Fell & Duver (2023), published in the journal Applied Economics. That methodology outlines an approach to quantification of the trade effects of non-tariff measures (NTMs) at a bilateral and product level. Improvements are proposed in relation to:

• A more realistic behavioural response of sellers to NTMs
• A more realistic representation of large country trade effects
• Improvements to GDP data
• Improvements to bilateral tariff data
• Exclusion of intranational data

Key Findings

• Accounting for the changes outlined in the paper will generally reduce the estimated ad valorem equivalent tariff, at least in global grains markets.
• Incorporating the changes in Fell & Creed (2024) improves the evidence base on the impacts of non-tariff measures to better support decision-making.