Do technical barriers to trade promote or restrict trade? Evidence from China

Xiaohua BAO, Larry D. QIU

Research output: Journal PublicationsJournal Article (refereed)peer-review

19 Citations (Scopus)

Abstract

The use of technical barriers to trade (TBT) is widespread and has increasing impact on international trade. In contrast to most other trade measures, TBT have both trade promotion and trade restriction effects. Due to their theoretical complexity and data scarcity, TBT have been considered as one of the most difficult non-tariff barriers (NTBs) to quantify. In this paper, we construct a TBT database from 1998-2006 to examine the influence of TBT imposed by China on the country's imports. When using the frequency index, we find that TBT are trade restrictive: a one unit increase in TBT will decrease import value by about 0.8%. However, when the coverage ratio is used, we find that the negative effects of TBT are not statistically significant based on the entire period. However, if the focus is shifted to data from 1998-2001, we find that TBT have trade promotion effects. A one unit increase in TBT will increase import value by about 0.2%. Finally, China's TBT (measured by both frequency index and coverage ratio) are trade restricting for agriculture goods but trade promoting for manufacturing goods.

Original languageEnglish
Pages (from-to)253-278
Number of pages26
JournalAsia-Pacific Journal of Accounting and Economics
Volume17
Issue number3
DOIs
Publication statusPublished - 2010
Externally publishedYes

Keywords

  • China's trade
  • Coverage ratio
  • Frequency index
  • Non-tariff barriers
  • Technical barriers to trade

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