Pakistan Institute of Development Economics


Impact of Technical Barriers to Trade on Trade between China and Pakistan

The technical barriers to trade (TBT) posed by WTO has impacted global trade pattern; similarly it has effected bilateral trade between China and Pakistan. This non-tariff barrier (NTB) has promoted trade viz-a-viz restricted trade. Many of China’s TBT protect sophisticated manufacturers. Unlike Pakistan, a large proportion of China’s TBT create delays and processing hurdles that raise the costs of foreign competitors rather than shutting them out of the market [Kayani and Shah (2014)]. Bao and Qiu (2012) found that a country’s TBT notifications decrease other countries’ probability of exporting, but increase their export volumes. This research paper estimates empirically the effects of TBT notifications on export of Pakistan to China using 4-digit HS code industry level data during 2002–2015, employing coverage ratio and frequency index. Coverage ratio captures the extent of exports covered by TBT, whereas frequency index considers the presence/absence of the TBT in a product without indicating the value of exports covered. When coverage ratio is used for estimation, we found the trade restrictive effects of TBT during the study period; whereas using the frequency index, we analysed that TBT enforcement increasing export from Pakistan to China. Colossal GDP increase in China also raised export from Pakistan.



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