Non-tariff barriers: A multi-billion dollar burden
This Insights paper summarises the impact of non-tariff barriers on agriculture and presents new modelling results that that show non-tariff barriers are equivalent to a 19% tariff and are a multi-billion dollar burden on Australian agricultural exports.
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Overview
Better market access benefits Australia’s exporters and supports market diversification goals. Australian agricultural exporters are long term beneficiaries of the removal of trade barriers globally through World Trade Organization mechanisms and Australia’s free trade agreements. As average applied tariffs on Australian exports fell in recent decades, the number of non-tariff barriers rose, raising concerns that tariffs are being replaced by protectionist non-tariff barriers.
This Insights paper summarises the impact of non-tariff barriers on agriculture. It also presents new modelling results that highlights that these non-tariff barriers are both equivalent to a 19% tariff on Australian agriculture, and constitute a multi-billion dollar burden on Australian agricultural exports, warranting strong efforts to combat their rise. This report updates an earlier research paper, offering more detailed insight.
Key findings
- Agricultural tariffs have fallen in the past 30 years, but the burden of NTBs has risen.
- Quantifying the burden of these NTBs requires caution – not controlling for and accounting for key economic effects can lead to an overstatement of the benefits of removing NTBs.
- New modelling shows that non-tariff barriers are equivalent to a 19% tariff on Australian agriculture and impose a multi-billion dollar burden on Australian agricultural exports, warranting strong and concerted efforts to combat their rise.