Quantification of the Intensity of Non-Tariff Measures as Trade Barriers : A Focus on Sanitary and Phytosanitary Measures(SPS) and Technical Barriers to Trade (TBT)

Abstract

The estimation model of Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Measures (SPS) developed in this study applied frequency methods relying on inventory-data. Such approaches allowed the collection of data from readily available sources like those of the WTO or UNCTAD. However, the model enhanced the previous frequency methods by relying on multiple, rather than a single data type or source. It also included WTOs Specific Trade Concern (STC) data that reflect the conflictive factors of non-tariff measures, rather than treat all such measures equally. This was in order to assess better their trade-barrier effect.

By combining three variables which were, WTO Notification reports, STCs raised, and number of regulations from UNCTAD TRAINS database, a more comprehensive index was established to reflect the intensities of the trade-barrier effects caused by non-tariff measures. TBT intensity was reflected in the CTII, whereas SPS intensity was reflected in the CSII. Finally, the CTSI was derived as a simple average of the two indexes, as an indicator for the intensity of both TBT and SPS combined. Once the three indexes were calculated, the TBT/SPS Triangle was established as a visual indicator of the index results.

With the measurement model established, a practical analysis was done on world trade data for the years from 2013 to 2017, to examine the actual circumstances related to trade barriers formed by non-tariff measures. Results on the seven product-groups where both TBT and SPS are applied were, that the plants and other edible produce of plant origin sector was faced with the most intense threat from TBT and SPS. However, the results were not generalizable to TBT since TBTs affect a much wider scope of industries other than those examined. Therefore, as additional research, CTII was derived for all other existing industries. As a result, vegetable products (HS06-15) that include plants and other edible produce of plant origin showed high index values, even compared to all other traded industries in the world. This implied that the vegetable products have currently become a major target for non-tariff barriers, whether it be TBT or SPS. Overall, among all fifteen industries, the food and agricultural industry was found to be the focus of important non-tariff barriers to trade.