The Consequences of Non-Tariff Trade Barriers: Theory and Evidence from Import Licenses in Argentina
Peer Reviewed
Date issued
Nov 2024
Subject
Small Business;
Tariff System;
Import ;
Export;
Import of Goods;
Forest Resource;
Labor;
Integration and Trade
JEL code
D43 - Oligopoly and Other Forms of Market Imperfection;
F13 - Trade Policy • International Trade Organizations;
F14 - Empirical Studies of Trade;
F42 - International Policy Coordination and Transmission;
F68 - Policy
Country
Argentina;
Argentina
Category
Working Papers
As WTO regulations limited tariffs, non-tariff barriers, such as import licenses (NAILs), became essential trade policy tools. This paper examines how NAILs impact downstream firms in Argentina. Using a novel dataset and the staggered introduction of NAILs between 2005-2011 for identification, we analyze their causal effects on firms' imports and the subsequent effect on exports and employment. Results indicate that NAILs reduce firms' imports, inducing more exposed
firms to reduce exports and employment. A trade model with oligopolistic competition suggests that firms' market power can moderate the impact of NAILs in highly concentrated markets.
firms to reduce exports and employment. A trade model with oligopolistic competition suggests that firms' market power can moderate the impact of NAILs in highly concentrated markets.
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