Abstract
Abstract. The purpose of this study is to investigate empirically the impact of technical barriers to trade (TBTs) by using the gravity model. The study used data from South Africa’s exports of all products and other product groupings destined to 57 selected countries which comprise both developing and developed countries. To control for misspecification error the study incorporated other explanatory variables. STATA system version 13 was used to analyse the regression of data ranging from 1995 to 2015. The results revealed that TBT notifications in general are trade restrictive. The regression results unravel that TBTs negatively affect mechanic and electrical products more than other product groupings. Accordingly for all exports in general the study’s findings are an increase in the number of TBTs has an effect of reducing exports by 4.88% on average. Given the results from the study it is imperative for South Africa to harmonise its standards with its trading partners.
Keywords. Gravity model, South Africa, Technical regulation, WTO.
JEL. F10, F40.
References
Anderson, J.E., & Van Wincoop, E. (2001).Gravity with Gravitas: A Solution to the Border Puzzle, NBER Working Paper, No. 8079. doi. 10.3386/w8079
Bao, X., & Qiu, L.D. (2010). Do technical barriers to trade promote or restrict trade? Evidence from China, Asia-Pacific Journal of Accounting & Economics, 17(3), 253-280.
Bao, X., & Qiu, L.D. (2012). How do technical barriers to trade influence trade? Review of International Economics, 20(4), 691-706. doi. 10.1111/j.1467-9396.2012.01047.x
Baum, C.F. (2006). Stata tip 38: Testing for groupwiseheteroskedasticity. The Stata Journal, 6(4), 590-592.
Beghin, J.C., & Bureau, J. (2001).Quantification of sanitary, phytosanitary, and technical barriers to trade for trade policy analysis Center for Agricultural and Rural Development, Iowa State University.
Bratt, M. (2014).Estimating the Bilateral Impact of Non-Tariff Measures (NTMs), Universite de Geneve Working Paper Series, No.WPS14-01-1. [Retrieved from].
Brodzicki, T., Śledziewska, K., Ciolek, D., &Uminski, S. (2015). Extended gravity model of Polish trade.Empirical analysis with panel data methods, Institute for Development Working Paper, Noç003/2015. [Retrieved from].
Caimei, H. (2016). The impact of technology standards on the Trade - An empirical study between China and Japan.Unpublished Paper, [Retrieved from].
Disdier, A., Fontagné, L., &Cadot, O. (2015). North-south standards harmonization and international trade. The World Bank Economic Review, 29(2), 327-352. doi. 10.1093/wber/lht039
Essaji, A. (2008). Technical regulations and specialization in international trade. Journal of International Economics, 76(2), 166-176. doi. 10.1016/j.jinteco.2008.06.008
Gebrehiwet, Y., Ngqangweni, S., & Kirsten, J.F. (2007). Quantifying the trade effect of sanitary and phytosanitary regulations of OECD countries on South African food exports.Agrekon, 46(1), 1-17. doi. 10.1080/03031853.2007.9523759
Henson, S., & Loader, R.J. (2000). An assessment of the costs for international trade in meeting regulatory requirements OECD Working Paper, No.87943. [Retrieved from].
Kapuya, T. (2015).The trade effects of technical barriers on South Africa’s orange exports. Agrekon: Agricultural Economics Research, Policy and Practice in Southern Africa, 54(1) 1-27. doi. 10.1080/03031853.2015.1019523
Nag, B., & Nandi, A. (2006). Analysing India’s trade dynamics vis-É-vis SAARC members using the gravity model. South Asia Economic Journal, 7(1), 83-98. doi. 10.1177/139156140500700105
Otsuki, T., Maskus, K.E., & Wilson, J. S. (1999). Quantifying the impact of technical barriers to trade: A framework for analysis. World Bank Policy Research Working Paper, No.2512.
Otsuki, T., Wilson, J., & Sewadeh, M. (2000). Saving two in a billion: A case study to quantify the trade effect of European food standards on African exports. Washington, DC: World Bank.
Schofer, E. (2010). Class 3: Count Models - UCI Social Sciences. [Retrieved from].
Silva, J.S., &Tenreyro, S. (2006). The log of gravity. The Review of Economics and Statistics, 88(4), 641-658.
Siyakiya, P. (2016). An econometric analysis of Zimbabwe’s export competitiveness. Maghreb Review of Economic and Management, 3(2), 35-45.
Swann, G.P. (2010). International standards and trade.A Review of the Empirical Literature, OECD Trade Policy Working Papers, No. 97, OECD Publishing. [Retrieved from].
Westerlund, J., & Wilhelmsson, F. (2011).Estimating the gravity model without gravity using panel data.Applied Economics, 43(6), 641-649. doi. 10.1080/00036840802599784
Wilson, J.S., & Otsuki, T. (2004). Standards and technical regulations and firms in developing countries: New evidence from a World Bank technical barriers to trade survey.World Bank, Washington DC. [Retrieved from].
Yoon, K., Li, Z., & Hossain, S.(2014). Do technical regulations affect the economies of trading partners? Evidence from South Korea.Proceedings of Internation al Social Sciences and Business Research Conference 4-5 December, Kathmandu, Nepal. [Retrieved from].
