Summary: In response to a congressional request, GAO analyzed efforts to quantify the effects on trade of non-tariff measures (NTM) such as quotas and subsidies.
GAO found that researchers have had great difficulty in quantifying the effects of some NTM, such as health and safety standards, because their effect tends to vary greatly across sectors of the economy. Although researchers have been able to quantify the effects of other NTM, such as quotas, their estimates have not been widely accepted. Therefore, when a new round of trade talks is held, the problems in quantifying the effects of NTM will: (1) help make the negotiations more contentious than prior negotiations that centered around lowering tariff rates; and (2) cause negotiators to place more reliance on other factors in their discussions to lower NTM. However, GAO believes that research should continue to develop more accurate estimates of the effects of NTM since such estimates should help countries decide what NTM to try to eliminate and provide negotiators with a rough comparison of the effects of some NTM.
