The Implications of NTB Inventory Studies

Although the procedure does not provide basic information for simulating economic effects of nontariff barriers (as do most of the studies surveyed in Chapter 5), the ‘inventory’ approach has been widely used in NTB studies. However, a problem that must be resolved before any ‘inventory’ analysis of trade restraints is undertaken is to determine which nontariff measures will be included in the empirical analysis. One potential approach is to base an empirical study on all entries in the inventory, but there are acknowledged problems with such a line of analysis. The major difficulty is that it would include measures like health and sanitary requirements or automatic import authorisation systems that may often have no, or relatively unimportant, trade effects. As such, NTM frequency or trade coverage indices which included such regulations would likely overstate the importance of nontariff measures.