Impacts of Tariffs, Non-tariff Measures and FTAs on Import Performance: Evidence from Thailand
Keywords:
Trade Policy, Tariff, Non-tariff measures, Free Trade AgreementAbstract
This paper examines the impacts of trade policy in Thailand, focusing on both tariffs and non-tariff measures (NTMs), on total imports as well as disaggregated imports, which include finished products, capital goods, and raw materials during the period from 2012 to 2021. Tariff protection is measured in terms of both the nominal and effective rates of protection, as well as the protection adjusted for FTA utilization rates. Non-tariff measures, particularly technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures, which have significantly increased over the past decade, are analyzed through various estimates. The results indicate that tariff protection, especially the effective rate of protection, has a stronger impact on import volume. Preferential tariff rates under free trade agreements play a crucial role in enhancing the positive effects of trade liberalization on import volume. NTMs, particularly TBTs, contribute to higher import demand, likely due to the expected higher quality of imports. These positive effects are more pronounced for imports from developed countries. Both tariffs and NTMs show varying impacts across different product categories, with the greatest effects observed in intermediate products, followed by finished products and capital goods, respectively.
References
Abbas, S. (2018). Free Trade Agreements and International Trade Flow of Pakistan: A Gravity Modelling Approach.
Agung, A. S., Ishak, Z., Asngari, I., & Bashir, A. (2019). The effect of ASEAN-Korea free trade agreement (AKFTA) on Indonesia trade: A gravity model approach. Jurnal Ekonomi Pembangunan, 17(1), 1–7.
Ahmed, G., Arshad Khan, M., & Afzal, M. (2016). Trade liberalization and industrial productivity: Evidence from Pakistan (No. 70744). University Library of Munich, Germany.
Akintola, A., Boughanmi, H., Antimani, A., Zaibet, L., & Kotagama, H. (2021). Estimating the impacts of non-tariff measures in the Indian Ocean Rim Association. Sustainability, 14(1), 68.
Amiti, M., & Konings, J. (2007). Trade liberalization, intermediate inputs, and productivity: Evidence from Indonesia. American Economic Review, 97(5), 1611–1638.
Baier, S. L., & Bergstrand, J. H. (2007). Do free trade agreements actually increase members’ international trade? Journal of International Economics, 71(1), 72–95.
Balassa, B. (1965). Tariff protection in industrial countries: an evaluation. Journal of Political Economy, 73(6), 573–594.
Bernard, A. B., Eaton, J., Jensen, J. B., & Kortum, S. (2003). Plants and productivity in international trade. American Economic Review, 93(4), 1268–1290.
Bratt, M. (2017). Estimating the bilateral impact of non-tariff measures on trade. Review of International Economics, 25(5), 1105–1129.
Cadot, O., & Ing, L. Y. (2017). Ad valorem equivalents of non-tariff measures in ASEAN. ERIA Discussion Paper Series.
Cadot, O., Gourdon, J., & Tongeren, F. V. (2018). Estimating Ad Valorem Equivalents of Non-Tariff Measures: Combining Price-Based and Quantity-Based Approaches. OECD Trade Policy Papers, No. 215.
Cadot, O., Gourdon, J., & Van Tongeren, F. (2018). Estimating ad valorem equivalents of non-tariff measures: Combining price-based and quantity-based approaches.
Cadot, O., & Ing, L. Y. (2019). How restrictive are ASEAN’s rules of origin? In L. Y. Ing, M. Richardson, & S. Urata (Eds.), East Asian Integration: Goods, Services and Investment (pp. 143–170). Routledge.
Chang, H. J., & Andreoni, A. (2016). Industrial policy in a changing world: basic principles, neglected issues and new challenges. Cambridge Journal of Economics, 40, 2138–52.
Chen, B., Ma, H., & Jacks, D. S. (2017). Revisiting the effective rate of protection in the late stages of Chinese industrialisation. The World Economy, 40(2), 424–438.
Cirera, X., Lederman, D., Márquez Castillejo, J. A., Rochina Barrachina, M. E., & Sanchis-Llopis, J. A. (2021). Firm productivity gains in a period of slow trade liberalization: evidence from Brazil. Economic Policy, 38(1), 57–87.
Corden, W. M. (1966). The structure of a tariff system and the effective protective rate. Journal of Political Economy, 74(3), 221–237.
Dadakas, D., Ghazvini Kor, S., & Fargher, S. (2020). Examining the trade potential of the UAE using a gravity model and a Poisson pseudo maximum likelihood estimator. The Journal of International Trade & Economic Development, 29(5), 619–646.
Dinh, H. B., Nguyen Phuc, H., Bui, T., & Nguyen, H. (2020). Declining protection for Vietnamese agriculture under trade liberalization: Evidence from an input-output analysis. Economies, 8(2), 43.
Dolabella, M. (2020). Bilateral effects of non-tariff measures on international trade: Volume-based panel estimates.
Ghodsi, M., Gruebler, J., & Stehrer, R. (2016). Estimating importer-specific ad valorem equivalents of non-tariff measures (No. 129). WIIW Working Paper.
Harada, K., & Nishitateno, S. (2021). Measuring trade creation effects of free trade agreements: Evidence from wine trade in East Asia. Journal of Asian Economics, 74, 101308.
Hausmann, R., & Rodrik, D. (2003). Economic development as self-discovery. Journal of Development Economics, 72(2), 603–633.
Hausmann, R., Hwang, J., & Rodrik, D. (2007). What you export matters. Journal of Economic Growth, 12(1), 1–25.
Hayakawa, K. (2015). Do we really know about the effects of free trade agreements? Panel data evidence from Asia and Latin America. Asian Economic Journal, 29(3), 213–234.
Head, K., & Mayer, T. (2014). Gravity equations: Workhorse, toolkit, and cookbook. In Handbook of International Economics (Vol. 4, pp. 131–195). Elsevier.
Hettiarachchi, G. R. P. (2023). Evaluating the Impact of Bilateral Trade Agreements on Sri Lanka’s Export Performance: Gravity Model. Sri Lankan Journal of Business Economics, 12(2).
Jagdambe, S., & Kannan, E. (2020). Effects of ASEAN-India Free Trade Agreement on agricultural trade: The gravity model approach. World Development Perspectives, 19, 100212.
Jamil, N., Chaudhry, T. T., & Chaudhry, A. (2022). Trading textiles along the new silk route: The impact on Pakistani firms of gaining market access to China. Journal of Development Economics, 158, 102935.
Jin, Y. (2023). The impact of FTAs on export duration: Evidence from China’s agricultural firms. The Journal of International Trade & Economic Development, 32(5), 793–823.
Jones, W. R. (1971). A three factor model in theory, trade, and history. Trade, balance of payments and growth, 3–21.
Jongwanich, J. (2009). The impact of food safety standards on processed food exports from developing countries. Food Policy, 34(5), 447–457.
Jongwanich, J., & Kohpaiboon, A. (2017). Trade Protection and Firm Productivity: Evidence from Thai Manufacturing. The Developing Economies, 55(2), 130–157.
Jongwanich, J., & Kohpaiboon, A. (2020). Effectiveness of industrial policy on firm productivity: evidence from Thai manufacturing. Asian-Pacific Economic Literature, 34(2), 39–63.
Jongwanich, J. (2022). The economic consequences of globalization on Thailand. Routledge.
Jongwanich, J. (2024). Free trade agreements (FTAs) and export structures: evidence from Thailand. Journal of the Asia Pacific Economy, 1–39.
Jouanjean, M.-A., Maur, J.-C., & Shepherd, B. (2015). Reputation matters: Spillover effects for developing countries in the enforcement of US food safety measures. Food Policy, 55(6), 81–91.
Karkanis, D., & Fotopoulou, M. (2021). Trade integration, product diversification and the gravity equation: evidence from the Chinese merchandise imports. Journal of Chinese Economic and Foreign Trade Studies, 15(1), 16–34.
Kohpaiboon, A. (2018). International Economic for development (In Thai). Thammasat University Press.
Kohpaiboon, A., & Jongwanich, J. (2019). The role of FTAs: the Thai experience. In L. Y. Ing, M. Richardson, & S. Urata (Eds.), East Asian Integration: Goods, Services and Investment (pp. 114–142). Routledge.
Kohpaiboon, A., & Jongwanich, J. (2022). Changes in Trade and Investment Policies in Thailand and the Implications for Medium-term Growth. ERIA Discussion Paper Series No. 436.
Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2018). International Economics: Theory and Policy. Pearson Education.
Masunda, S., & Mhonyera, G. (2024). Effects of free trade on export efficiency of COMESA member-states. Journal of Shipping and Trade, 9(1), 1–15.
Melitz, M. J. (2003). The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica, 71(6), 1695–1725.
Melo, J. D., & Nicita, A. (2018). Non-Tariff Measures: Data and Quantitative Tools of Analysis. Ferdi working papers No. 218.
Ohlin, B. (1933). Interregional and International Trade. London: Harvard University Press.
Pack, H., & Saggi, K. (2006). Is there a case for industrial policy? A critical survey. The World Bank Research Observer, 21(2), 267–297.
Ramaswamy, S., Choutagunta, A., & Sahu, S. K. (2021). Evaluating Asian free trade agreements: What does gravity model tell us?. Foreign Trade Review, 56(1), 60–70.
Ricardo, D. (1821). The Principles of Political Economy and Taxation. Dent, London.
Romyern, L., Nunti, C., & Neranon, P. (2023). Trade efficiency under FTA for Thailand’s agricultural exports: copula-based gravity stochastic frontier model. Journal of Economic Structures, 12(1), 9.
Samuelson, P. A. (1971). Ohlin was right. The Swedish Journal of Economics, 73(4), 365–384.
Sarisae, S., Ariffin, M. I., & Alavi, R. (2023). The impact of trade facilitation on automotive export performance of Thailand. International Journal of Economic Policy in Emerging Economies, 17(4), 505–523.
Shepherd, B. (2013). The gravity model of international trade: A user guide.
Silva, J. S., & Tenreyro, S. (2006). The log of gravity. The Review of Economics and Statistics, 88(4), 641–658.
Tinbergen, J. (1962). Shaping the world economy: suggestions for an international economic policy.
Topalova, P., & Khandelwal, A. (2011). Trade liberalization and firm productivity: The case of India. Review of Economics and Statistics, 93(3), 995–1009.
USAID. (2008). Development of the effective rate of protection model for Ghana. http://www.ghanaimgoatseasci.com/documents/TIPCEE%20Rate%20Doc.pdf
UNCTAD. (2012). International classification of non-tariff measures. United Nations publication. https://unctad.org/webflyer/international-classification-non-tariff-measures-2019-version
UNCTAD. (2016). Guidelines to Collect Data on Official Non-Tariff Measures. United Nations publication. https://unctad.org/webflyer/guidelines-collect-data-official-non-tariff-measures-2019-version
UNCTAD. (2019). Navigation Non-tariff Measures towards Sustainable Development: Asia-Pacific Trade and Investment Report 2019. New York: United Nations publication. https://www.unescap.org/publications/APTIR2019
UNCTAD. (2022). Key Statistics and Trends in Trade Policy 2021: The Regional Comprehensive Economic Partnership Tariff Concessions. https://unctad.org/webflyer/key-statistics-and-trends-trade-policy-2021
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Thammasat Review
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
The opinions and ideas expressed in all submissions published in Thammasat Review are solely that of the author(s) and do not necessarily reflect that of the editors or the editorial board.
The copyright of all articles including all written content and illustrations belong to Thammasat Review. Any individuals or organisation wishing to publish, reproduce and distribute a particular manuscript must seek permission from the journal first.
