Estimating Augmented Trade Restrictiveness Indices to Evaluate Impacts of Non-Tariff Barrier for ASEAN Countries and Their Major Trading Partners.

This paper tries to empirically evaluate the effects of non-tariff barriers (NTBs) on trade inflow by constructing augmented trade restrictiveness indices (ATRI) for ASEAN countries and their major trading partners for the year 2016. This study employs econometric estimation to estimate the ad-valorem equivalent (AVE) for NTBs and then uses mathematical calculations to measure the ATRI of the respective countries and sectors. Findings show that the previous calculation of trade restrictiveness indices (TRI) is bias towards large positive values, and the current study has overcome these issues by making some modifications in the formula. Results illustrate that poorer countries had imposed more restricted trade policies. It is obvious that NTBs have a vital role in influencing trade flows as the ATRI recorded on average, 17% higher value when we consider the existence of NTBs. Ordinary Least Square (OLS) regression supports our hypothesis that an increase in ATRI leads to reduction in imports. Hence, detailed analysis of NTBs is deemed necessary as it shapes the international trade flow. [ABSTRACT FROM AUTHOR]