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The Trade Impact of EU Tariff Margins: An Empirical Assessment

1
Department of Economics, University of Molise, 86100 Campobasso, Italy
2
Department of Economics, University of Roma Tre, 00145 Rome, Italy
*
Author to whom correspondence should be addressed.
Soc. Sci. 2019, 8(9), 261; https://doi.org/10.3390/socsci8090261
Received: 31 May 2019 / Revised: 3 September 2019 / Accepted: 9 September 2019 / Published: 12 September 2019
(This article belongs to the Special Issue The Analysis of EU Trade Policies)
This article provides an assessment of how the EU trade policies affect EU imports. The main contribution is that we compute a theoretically consistent measure of the EU tariff margin and estimate the elasticities of substitution at the sectoral level, using a structural gravity model that includes domestic trade flows. Our analysis is related to the most recent gravity literature and the identification strategy is based on the existence of a sufficient variation of the tariffs applied by the EU to different markets of origin. We use cross-section data (more than 5000 tariff lines and 188 exporters, including the EU28 Member States, in the year 2017), to obtain structural gravity estimates of trade substitution elasticities. Since tariffs greatly differ by product, an in-depth analysis should take place at the tariff line. Moreover, we use the information provided by the Eurostat Comext database on the tariff regime of imports, so we distinguish the Most Favored Nation (MFN) from the preferential trade flows. The estimated elasticities can be used to calculate the counterfactual change in total EU imports that would follow either from the removal of trade preferences or from the removal of trade policies. View Full-Text
Keywords: gravity model; European trade policy; bilateral tariff margin; preferential trade agreements gravity model; European trade policy; bilateral tariff margin; preferential trade agreements
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Cipollina, M.; Salvatici, L. The Trade Impact of EU Tariff Margins: An Empirical Assessment. Soc. Sci. 2019, 8, 261.

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