Teadusseminar "One More Document: The Effects of Non-Tariff Barriers on Trade" (Lisa Eva-Maria Scheckenhofer)

One More Document: The Effects of Non-Tariff Barriers on Trade 

Lisa Eva-Maria Scheckenhofer (Ifo-institute) 

Teisipäeval, 11. juunil 2024 kell 11.00-12.00 Delta ruum 1024 ja Zoom

With tariffs at historically low levels, current trade policy is very much centered around reducing non-tariff barriers (NTBs), yet quantifying their effects remains challenging. This paper uses Brexit as a policy shock to estimate the effect of NTBs on trade. We compile new product-level data on the universe of regulatory measures that a UK firm must fulfill at the border when exporting a product to the EU in response to Brexit. The structure of the event and the data allow us to account for the endogeneity of trade policy, and demand- and supply shocks and isolate one channel through which NTBs affect trade - the documentary compliance costs. Our findings indicate that one additional requirement at the EU border decreases trade on both margins. This negative effect is magnified in small and new EU member states and heterogeneous across sectors. We categorize NTBs by type and show that the costs of Brexit are substantially influenced by the characteristics of NTBs and the extent of regulatory leeway, resulting in a tariff equivalent that ranges between 3.4 % and 16.9 %.