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51. Non-tariff Trade Policy Analysis: An Ex-post Assessment of the EU-Korea Agreement

Author:
Julia Grübler and Oliver Reiter
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Many different approaches have developed for the evaluation of non-tariff measures (NTMs) and free trade agreements (FTAs). Moving on from models using simple dummy variables, today a range of databases can capture different aspects of NTMs and FTAs. Some assess the depth of FTAs by extracting information from legal texts. Other data sources are based on surveys, on complaints by trading partners at the World Trade Organization (WTO) or notifications by companies or countries. This paper uses a gravity model to assess the value added of information on FTAs and NTMs by evaluating ex-post their ability to predict the trade effects of the EU-South Korea Free Trade Agreement, the first ‘second-generation’ FTA of the EU, applied since 2011. Our results show that, when accounting for information on the FTA components, no extra trade effect is attributable to the EU-South Korea FTA. The message from the evolution of NTMs differs considerably according to the indicator used, but trade predictions are hardly affected. On the aggregate country level, provisions on investments exhibit a particularly strong positive effect, while regulations on intellectual property rights seem to hamper bilateral trade. Most specifications, furthermore, point to a negative effect of differences in the number of technical barriers to trade (TBT) applied and sanitary and phytosanitary measures (SPS) against which trading partners issued complaints at the WTO.
Topic:
International Trade and Finance, European Union, Free Trade, WTO, and Non-Tariff Measures
Political Geography:
Europe and South Korea

52. Refugees’ Integration into the Austrian Labour Market: Dynamics of Occupational Mobility and Job-Skills Mismatch

Author:
Mahdi Ghodsi and Robert Stehrer
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Eight multilateral rounds of negotiations under the General Agreement on Tariffs and Trade (GATT) and international agreements under the World Trade Organisation (WTO) have contributed significantly to the reduction of tariffs among WTO members. However, over the years legitimate reasons for the imposition of non-tariff measures (NTMs) within regulations have triggered their extensive use. Among these measures, technical barriers to trade (TBTs) and sanitary and phytosanitary (SPS) measures allow countries to impose restrictions on the import of low-quality products suspected of harming domestic consumers’ health, plant life or the environment. Such trade policy instruments may lead to higher standards in the import market, in addition to improving market efficiency through information requirements such as mandatory labelling. This paper analyses two types of regulative and standard-like NTMs – TBTs and SPS measures – and the quality improvement of traded products that is driven by their imposition, which might be a general underlying motive for the adoption of such regulations. Based on a model framework involving both the supply and the demand side of trade and using four types of measures of these NTMs, this paper assesses the impact of TBTs and SPS measures on the quality of traded products. A dummy variable measuring the existence of these NTMs and a count variable indicating their stringency are used in the analysis. Moreover, two other variables indicate flows of NTMs imposed in each year and stocks of these NTMs accumulated over years. The results indicate that TBTs and SPS measures do indeed imply a higher quality of traded products, which is also consistent with the model when NTMs enter as a specific trade cost. Stringent TBTs with more regulations imposed in each year (i.e. flows of count TBTs) have the largest impact on the quality of traded products. However, for SPS measures only the existence of a regulation (i.e. the dummy variable on flows of SPS measures) on a traded product has the strongest impact on its quality.
Topic:
Economics, International Political Economy, International Trade and Finance, WTO, Non-Tariff Measures, and GATT
Political Geography:
Europe and Global Focus