Technical barriers to trade and SPS measures and export dynamics

Traditional trade policy tools like tariffs and quotas are being actively replaced with non-tariff policy tools (NTB) by governments throughout the world. In this paper we investigate how introduction of two types of non-tariff measures, technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures, affects exporters in different countries. According to the heterogeneous firms trade theory commenced with Melitz model any additional cost of exporting will force some of the firms to stop exporting, thus reducing the number of exporting firms and products exported. We test this prediction using two primary data sources: WTO data on trade concerns related to TBT and SPS measures and World Bank Exporter Dynamics Database controlling for other factors influencing export dynamics. Contrary to the previous studies our results seem to suggest no casual effect of the introduction of NTBs on export concentration and firms’ exit/entry rates. Published by Norwegian Institute of International Affairs * This paper is written with financial support by “Non-tariff barriers, food safety and international food trade” joint project of Norwegian Institute of International Affairs (NUPI), University of Life Sciences and Kyiv School of Economics (KSE) funded by the Research Council of Norway (Contract no. 216742/O10).