How Much Do Free Trade Agreements Reduce Impediments to Trade?

Kazunobu Hayakawa, Fukunari Kimura

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

This paper empirically investigates how far free trade agreements (FTAs) successfully lower tariff rates and non-tariff barriers (NTBs) for manufacturing industries by employing the bilateral tariff and NTB data in time series for countries in the world. We find that FTAs under GATT Article XXIV and the Enabling Clause are associated with the 2.0 and 1.5 % lower tariff rates, respectively. In the case of NTBs, on the other hand, their respective effects are 2.1 and 2.4 %. Also, compared with these effects of FTAs, WTO membership does not have large effects on tariff rates but does have them on NTBs. These results provide important implication for the literature on the numerical assessment of FTAs.

Original languageEnglish
Pages (from-to)711-729
Number of pages19
JournalOpen Economies Review
Volume26
Issue number4
DOIs
Publication statusPublished - 2014 Oct 24

Keywords

  • Free Trade Agreement
  • Non-tariff barriers
  • Simulation
  • Tariff rates
  • World Trade Organization

ASJC Scopus subject areas

  • Economics and Econometrics

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