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Trade Fraud and Non-Tariff Measures

Author

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  • Kee,Hiau Looi
  • Nicita,Alessandro
Abstract
Similar to tariffs, non-tariff measures may induce trade fraud when they are restrictive.This paper examines whether discrepancies observed in the official trade statistics of importing and exportingcountries are partly due to trade fraud from evading border non-tariff measures. To capture the restrictiveness ofnon-tariff measures, the paper estimates the ad valorem equivalent with importer-exporter-product variations. Itpresents a theoretical model and empirical evidence showing that discrepancies increase with ad valorem equivalents,consistent with the trade fraud due to traders intentionally mis-declaring countries of origin or misclassifying productsin order to evade border non-tariff measures. The results are driven by homogeneous products and the trade betweendeveloped and developing countries.

Suggested Citation

  • Kee,Hiau Looi & Nicita,Alessandro, 2022. "Trade Fraud and Non-Tariff Measures," Policy Research Working Paper Series 10112, The World Bank.
  • Handle: RePEc:wbk:wbrwps:10112
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    Cited by:

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    2. Kenichi Kawasaki, 2023. "Review of Economic Impact of CPTPP," GRIPS Discussion Papers 23-10, National Graduate Institute for Policy Studies.
    3. Garcés, Irene & Vogt, Achim, 2024. "Global value chain integration and non-tariff measures," Economics Letters, Elsevier, vol. 235(C).
    4. Ariel Weinberger & Luca Macedoni, 2023. "International Spillovers of Quality Regulations," Working Papers 2023-10, The George Washington University, Institute for International Economic Policy.
    5. Alessandro Nicita & Enxhi Tresa, 2022. "Trade policy and trade resilience during the 2020 trade downturn," UNCTAD Working Papers #1, United Nations Conference on Trade and Development.
    6. Wassie, Mengistu Alamneh & Kornher, Lukas & Zaki, Chahir, 2024. "Revisiting the Impact of Trade Facilitation Measures in Africa: Structural Gravity Estimation and Ad Valorem Tariff Equivalents," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344296, International Association of Agricultural Economists (IAAE).
    7. Al Wazzan, Lynn & Grether, Pablo & Olarreaga, Marcelo, 2023. "Measuring misreporting at customs," Economics Letters, Elsevier, vol. 229(C).

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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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