Tariff evasion in agriculture: the role of non-tariff measures

Abstract

Abstract This study investigates the impacts of non-tariff measures (NTMs) on tariff evasion in agriculture. We find that sanitary and phytosanitary standard measure of tolerance limits for residues and restricted use of substances significantly reduces tariff evasion. We also find that this dampening impact occurs via price underreporting rather than quantity underreporting or product misclassification. Heterogeneous analysis shows that this impact exists for developing countries but not for developed countries. These findings highlight the importance of accounting for NTMs’ impacts on tariff evasion in agricultural trade policy analysis.