Impacts of tariff and non-tariff trade barriers on the global forest products trade: an application of the Global Forest Product Model

Although there has been considerable analysis on the effects of trade measures on forest product markets, these have tended to focus on tariffs. There is growing concern about the impact of non-tariff trade measures on the global forest product sector. The objective of this study is to fill a gap and estimate trade and economic impacts of non-tariff barriers and compare them to the impacts of tariffs. Ad-valorem equivalent estimates for a set of well-defined non-tariff trade restrictions are incorporated into a global forest products trade model. Nontariff barriers are found to be less common than tariffs but have similar or bigger aggregate impacts on trade, production, producer revenues, consumer expenditures and value added as tariffs. There is uncertainty in the estimation of ad-valorem equivalence of non-tariff barriers that serves as a caveat on the results. Impacts of reducing tariff and non-tariff barriers are often different across regions and products. While not free from uncertainty, the results underscore the importance of analysing both types of trade policy and the need for continuing comprehensive trade liberalization.