| Pub. Date | : Jan, 2024 |
|---|---|
| Product Name | : The IUP Journal of Applied Economics |
| Product Type | : Article |
| Product Code | : IJAE010124 |
| Author Name | : Vivek Tiwari and Chandrima Sikdar |
| Availability | : YES |
| Subject/Domain | : Economics |
| Download Format | : PDF Format |
| No. of Pages | : 27 |
The World Trade Organization's (WTO) policy of free and fair trade has led to persistent decline in the average world trade tariff rates. It also ensured prior ratification of non-tariff measures implemented by countries. At the same time, countries across the world have introduced trade facilitation measures to ensure smooth flow of goods across borders. Despite these, countries still face substantial trade barriers. Against this backdrop, using data from India, the present paper aims at analyzing the impact of trade barriers on its exports by calculating a bilateral trade restrictiveness index based on tariff, non-tariff and border administrative and regulatory measures. The results show that trade restrictions faced by a country depend on its export basket composition, specific export products and its export destinations and hence are unique to each country. They confirm the existence of substantial trade barriers for a country, as against the general perception that trade restrictions have declined over the years.
Free trade has been one of the main pillars of globalization. Throughout the latter part of the 20th century, free trade was considered a growth driver for countries. It was widely held that trade integration among nations, including integration through global value chain, results in welfare gains to countries due to allocative efficiency, specialization, comparative advantage, and productivity gains. Empirical evidence does support the beneficial impact of trade, which during the last two decades of the previous century grew at an average annual rate of 6%, twice as fast as world output (IMF, 2001).