On the Effects of Non-Tariff Measures on Brazilian Exports

• Main Authors: LUCAS P. DO C. FERRAZ, MARCEL RIBEIRO, PEDRO MONASTERIO
• Format: Article
• Language: English
• Published: Fundação Getúlio Vargas
• Series: Revista Brasileira de Economia
• Subjects: Non-tariff measures; SPS; TBT; Extensive margin of exports; Selection model; Firm heterogeneity
• Online Access: http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402017000300301&lng=en&tlng=en

This article estimates the effects of TBT/SPS measures on Brazilian exports, based on the recent literature of gravity models. A Heckman selection model - theoretically grounded on the seminal Melitz model of heterogeneous firms - highlights the role played by zero trade flows as well as firm heterogeneity for estimations using gravity equations, two factors usually omitted in standard specifications. We show that both extensive and intensive margins of Brazilian exports are, on average, negatively affected by pre-existing TBT and SPS measures. Moreover, we contribute to the empirical literature by providing comprehensive evidence of the sectoral effects of such measures over domestic exports. We find that TBT/SPS measures - though predominantly harmful - can foster exports in several sectors of the Brazilian economy.