We quantify the effects of non‐tariff measures on the extensive margin of trade, examining the number of countries exporting particular products to Canada, the European Union, New Zealand and the United States. We find that non‐tariff measures that impose a conformity requirement, that is, testing, certification or inspection, will reduce the number of countries exporting to these markets. Conformity requirements imposed for sanitary or phytosanitary reasons have the largest effect in Canada, reducing the number of exporting countries by 47% compared to the situation where no compliance requirement is imposed. Conformity requirements imposed for other reasons covered by the WTO Agreement on Technical Barriers to Trade have the largest effect in Canada and New Zealand, reducing the number of exporting countries by 27% compared to the situation where no compliance requirement is imposed. However, we generally find a statistically significant positive effect for nontariff measures that do not impose a compliance burden, suggesting that such measures may facilitate trade.

This paper explores the impact of reducing non‐tariff measures (NTMs) in major ASEAN countries. New econometric estimates of the impact of different types of NTMs are used in a global supply chain model to separately model the effects on intermediate products and those sold to final consumers. We also distinguish between whether the NTM cost burden is directed at exporters or importers. This paper makes important advances in modelling the heterogeneity of NTMs, offering much richer policy analysis of the impact of NTMs on supply chains in the Asia‐Pacific region than has previously been possible. We illustrate the benefits, both to the major ASEAN countries and to their trading partners, from the partial liberalisation by ASEAN countries of their most trade distorting types of NTMs. Such liberalisation increases the GDP and welfare of all countries, with the effect particularly pronounced for the major ASEAN countries themselves, especially Vietnam and the Philippines. As trade in plant products and animal products is particularly affected by NTMs, these sectors show the largest expansion of trade.

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