5. Conclusion and Policy Implications
Reducing trade policy barriers in developing countries has traditionally centered around border barriers such as tariffs. Since tariffs in both agriculture and manufacturing are still substantially high for less-developed countries, such a focus is from a policy vantage point unsurprising. At the same time, although the trade field is moving away more and more from this focal point on tariffs, this shift appears to become particularly imperative for countries with higher levels of development. Yet, the trade literature increasingly recognizes that non-tariff measures such as NTBs in agriculture and service trade barriers also contribute to a significant extent to the development of low-income countries. Using aggregated cross-country firm-level data for each HS 6-digit sector for mainly developing countries, I have tried to contribute to this process by looking into how these trade barriers impact export performance. Particularly, I provide a first attempt to estimate the marginal relative importance of all these barriers for the input use of developing countries.
The results of this paper demonstrate that at least one robust impact of both input NTBs in manufacturing and input barriers of Mode 1 services on the intensive margin of trade for mainly entrants in developing countries. Other results on input linkages on manufacturing tariffs and Mode 3 services depends on the type of controls used. I have furthermore shown that when taking into account year differences so that an input barrier affects export performance in the following year, input linkages of agricultural NTBs become important at the extensive margin of exports for entrants as well as exiters although input linkages on manufacturing tariffs in such a case still have a greater impact at the extensive margin in terms of coefficient size.
