Quantifying the trade impact of SPS and TBTs with product-level structural gravity

By: Ghodsi, Mahdi.
Contributor(s): Artuso, Fabio | Clarke, Julian L | Fontagné, Lionel | Santoni, Gianluca.
Material type: materialTypeLabelBookSeries: wiiw Working Papers: 273Publisher: Wien : Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw), 2026Description: 24 S., 3 Tables and 3 Figures, 30cm.Subject(s): Non-tariff measures: Ad valorem equivalents | Environmental goods | Critical mineralsCountries covered: non specificwiiw Research Areas: International Trade, Competitiveness and FDIClassification: F14 | F13 | F18 Online resources: Click here to access online Summary: Non-tariff measures (NTMs), especially sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBTs), have become crucial components of climate, industrial, and regulatory policy, impacting the majority of global trade. However, quantifying their effects on trade is challenging because NTMs are usually non-discriminatory and challenging to identify in standard gravity frameworks. Using a multi-stage structural gravity estimation strategy combined with a control-function correction for endogeneity, we estimate the trade elasticities and ad valorem equivalents of NTMs at the HS6 level for over 5,000 products. Our results reveal significant heterogeneity in NTM trade costs, especially in environmentally relevant sectors, such as clean technologies and electric vehicles. These estimates can inform regulatory impact assessments and general-equilibrium analyses of climate-aligned trade policies.

Non-tariff measures (NTMs), especially sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBTs), have become crucial components of climate, industrial, and regulatory policy, impacting the majority of global trade. However, quantifying their effects on trade is challenging because NTMs are usually non-discriminatory and challenging to identify in standard gravity frameworks. Using a multi-stage structural gravity estimation strategy combined with a control-function correction for endogeneity, we estimate the trade elasticities and ad valorem equivalents of NTMs at the HS6 level for over 5,000 products. Our results reveal significant heterogeneity in NTM trade costs, especially in environmentally relevant sectors, such as clean technologies and electric vehicles. These estimates can inform regulatory impact assessments and general-equilibrium analyses of climate-aligned trade policies.

The Vienna Instiute for International Economic Studies (wiiw)