Determining Tariff Equivalent of Non-Tariffs Barriers in Agriculural Sector of Iran: An Application to Import Elasticity Method

As tariff barriers among nations have declined in recent years due to free trade agreements, non-tariff barriers (NTBs) have increasingly become the way that governments restrict trade. The objective of this paper is to measure tariff equivalent of non-tariffs barriers (TE of NTBs) in agricultural sector of Iran using import elasticity approach over the period 1981 to 2007. For this purpose, we first estimate the quantity-impact of NTBs (including two broad types of NTBs —Core NTBs; import quota, technical regulations, as well as monopolistic measures and agricultural domestic support) on imports using log-linear model of import demand with assuming constant return technologies. Then, we convert the quantity impact of NTBs on imports into a tariff equivalent based on import demand elasticities. The results shows the average TE of NTBs for 9 group products are: -3.43% for wheat, 0.61% for rice, 1.74% for barely, 1.12% for maize, 3.13% for soybean, 1.67% for meat, 0.47% for oil, 2.18%for sugar and 7.92% for banana. Therefore, we can also conclude that non-tariff barriers imposed on all products have the protective role except for wheat.