Non-Tariff Measures and Their Impacts on ASEAN Economic Integration

• Main Author: Austria, Myrna S.
• Format: text
• Published: Animo Repository 2021
• Subjects: regional economic integration, gravity model, trade in goods, non-tariff measures, regulatory distance, PPML method; Economic Policy; International Economics; Regional Economics
• Online Access: https://animorepository.dlsu.edu.ph/res_aki/13; https://animorepository.dlsu.edu.ph/cgi/viewcontent.cgi?article=1012&context=res_aki
• Institution: De La Salle University

Using a gravity model that accounts for the asymmetric effects of non-tariff measures (NTMs), the study examined the impact of the five most prevalent NTMs in the region on intra-ASEAN imports. The study found that all five NTMs are significant factors affecting intra-ASEAN imports. However, their effects vary at the sectoral level, by pairs of trading partners, and whether the products are covered by mutual recognition and harmonization agreements (MRA) or not. For example, sanitary and phytosanitary (SPS) measures, in general, negatively affect imports and are trade-reducing. Exceptions are prepared foodstuff and medicinal products, both of which are covered by MRAs and harmonization agreements among the ASEAN. The positive effects of SPS measures on these two sectors provide evidence that NTMs that assure consumer safety and protection, while they could increase costs and price, increase consumer trust, and hence, promotes trade. Technical barriers to trade (TBT) measures are also deterrents to imports, in general. However, they are found to promote imports and are trade-enhancing for products covered by MRAs and harmonization agreements such as electrical machinery and equipment, prepared foodstuff, telecommunications equipment, and medical devices. The study also found that regulatory distance between ASEAN Member States (AMS) contributes positively to the effects of SPS and TBT. This means that in instances when an SPS or TBT measure is a deterrent to imports, regulatory distance lessens the negative effects.