Ad Valorem Equivalent of Non-Tariff Measures

The ad valorem equivalent (AVE) of non-tariff measures (NTMs) is the uniform tariff that will result in the same trade impacts on the import of a product due to the presence of the NTMs. In other words, the AVEs represent the additional costs that the presence of NTMs has on imports. The AVE estimation is based on data in the TRAINS database. To minimize time inconsistencies, the analysis utilizes a reduced sample of NTMs data collected between 2012 and 2016. The data is transformed in a cross section database spanning about 40 importing countries plus the European Union, about 200 exporting countries. AVEs are estimated at the HS 6 digit classification and on a bilateral basis. Additional data required for the estimation originates from TRAINS (tariffs), the United Nations Comtrade database (trade flows) and from the World Development Indicators database. The AVEs of NTMs presented here are based on the estimation method developed in Kee and Nicita (2018), which in turn, builds on the work of Kee, Nicita and Olarreaga (2009). The AVE of an NTM indicates the proportional rise in the domestic price of the goods to which it is applied, relative to a counterfactual where it is not applied.