Estimating the Impacts of Non-Tariff Measures in the Indian Ocean Rim Association

Abstract

In recent years, the Indian Ocean Rim Association has witnessed an increasing trend in the use of non-tariff measures (NTMs). This study evaluated the impact of NTMs in the Indian Ocean Rim Association through estimations of their ad valorem equivalents at the HS chapter and country levels. A gravity model using NTM count data (intensity) was specified and estimated to derive the importer-specific ad valorem equivalents for the four (4) most used NTMs in the region. The results showed the presence of both import-impeding and import-promoting effects of NTMs; however, the import-impeding effects dominated in the region. The quantitative restriction and safeguard measures were more restrictive compared to the sanitary and phytosanitary measures and technical barriers to trade. This was expected since quantitative restrictions are trade-distorting by design. This calls for reforming trade policy in the region toward NTMs that are more transparent and trade enhancing for successful subsequent trade negotiations in the Indian Ocean Rim Association, which would support the sustainable economic development of the region.

The Impact of Non-Tariff Measures on the Exporting of Agricultural Products of Cambodia

“…To evaluate the impact of four most used NMTs, the importer-specific ad valorem equivalents, on trade in the Indian Ocean Rim Association, a gravity model using NTM count data was carried out. The empirical finding of this research showed that SPS and TBT measures had less impact on trade in the region than import-impeding and import-promoting (Akintola et al, 2021). This results were inconsistence with a research conducted by Ronen (2017) and Dolabella (2020) that SPS and TBT had a sizeable negative impact on trade than other NTMs.…”