Trade-restricting impacts of non-tariff measures in Bangladesh

Abstract

This paper estimates the bilateral trade costs between Bangladesh and its leading trading partners before investigating the factors that influence Bangladesh’s import costs, including the contribution of NTMs. To measure implied bilateral trade costs, we first deploy an inverse gravity equation. We then estimate the determinants of import trade costs at the HS 6-digit product level, applying PPML estimation techniques to a gravity model, using a unique new NTM database developed for the current study. Our results show that imports to Bangladesh are related in an expected way to common trade cost proxies and that NTMs negatively impact imports.