The Net Effect of Technical Non-Tariff Measures in OECD countries on African Exports of Plant Products

Our theoretical findings highlight that the net effect of the TNTMs on aggregate bilateral trade depends not only on the elasticity of substitution and the elasticity of marginal cost with respect to the TNTMs but also the shape parameter of the distribution of marginal costs which depends on the technology. [...] However, Santeramo and Lamonaca (2019) highlighted that the effects of the proliferation of NTMs on international trade depend on the type of NTM, the countries in partnership and the type of commodity. [...] In complement to previous studies, we show that the net effect of TNTMs on aggregate bilateral trade depends not only on the elasticity of substitution between varieties of products and the elasticity of marginal cost with respect to the TNTMs but also the shape parameter of the distribution of marginal costs which depends on the technology. [...] Due to the set of TNTMs in force in each importing country j, the representative consumer is assumed to be perfectly informed about all of the attributes of plant product k exported by each exporting country i. She/he vertically differentiates the varieties by origin due to the reputation of each exporting country in terms of the quality and safety attributes of its products. [...] Identity (5) signifies that the passthrough of the TNTMs in force in an importing country to perceived quality is identical to the passthrough of the TNTMs of that importing country to the unit cost of compliance in an exporting country.