The differential effect of tariffs and non-tariff changes on agricultural exports: evidence from China’s RTAs

Purpose The trade-enhancing effect of regional trade agreements (RTAs) has been proved by many studies, while the differential roles of tariffs and non-tariff changes in RTAs have received little attention. This paper attempts to explore the source of trade effects of RTAs. Design/methodology/approach This paper focuses on 12 RTAs signed by China and decomposes the trade effect of RTAs into tariff and non-tariff effects using a structural gravity model. We further examine the heterogeneous effects of the two measures at national and product levels. Findings This research finds that (1) though RTAs have promoted China’s agricultural exports overall, non-tariff changes of RTAs show a negative effect; (2) tariff changes have a more significant promoting effect on China’s exports to developing countries than to developed countries, but non-tariff changes also have a significant opposite effect on the exports to these countries and (3) the trade effects of tariff changes do not exhibit significant heterogeneity at the product level, while non-tariff changes significantly hinder exports of agricultural products that China has comparative advantages in. Research limitations/implications Since only 12 RTAs signed by China are considered, although this could reflect the trade effects of tariffs and non-tariff changes of RTAs signed by developing countries, we believe it would be more interesting and meaningful to carry out further work on its impact on developed countries’ agricultural exports and compare it with the result of developing countries. We leave this comparison for future studies. Practical implications It is suggested that member countries should pay more attention to non-tariff changes and reach deeper RTAs to achieve a more transparent trading environment. And it is crucial to evaluate the effect of the RTAs and solve trade barriers timely. Originality/value The number of RTAs has been increasing. However, non-tariff barriers (NTBs) have also risen during the past 20 years. The question “What roles are tariffs and non-tariff changes of RTAs playing respectively” has yet to be answered. Decomposing the trade effects of RTAs and exploring the source of their trade effects help us better understand and utilize trade policy tools.