Quantifying Commercial Policies

Abstract

Introduction Most of this chapter is concerned with the measurement of non-tariff measures (NTMs) for use in the models that are discussed elsewhere in the book. However, first there is a brief discussion on problems related to the use of tariff information. Second, NTMs are defined and classified. Third, we look at the effects of NTMs and methods to compute those effects. This includes a review of the inventory approach, under which NTMs are catalogued; modeling approaches; tariff equivalents; subsidy equivalents; the Trade Restrictiveness Index (TRI) and effective protection. Finally, there is also a brief discussion on sources of data on NTMs. This chapter is a brief introduction to the subject and is not meant to be a comprehensive literature survey. However, the references should be of assistance to those who wish to delve further into the science (or art!) of commercial policy measurement. To steer readers, the most useful starting place would be Baldwin (1970a) and Corden (1971). More recent material is to be found in Laird and Yeats (1990), Feenstra (1988a), Vousden (1990) and Helpman and Krugman (1989). Agriculture has an NTM measurement industry of its own; starting places are Krueger, Schiff and Valdes (1988); Goldin and Knudsen (1990); OECD (1994); and Webb, Lopez and Penn (1990). A new body of literature, in the nascent stage, concerns the Trade Restrictiveness Index, developed by Anderson and Neary (1994a), mainly designed to measure changes in welfare resulting from policy changes over time.

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