III North American Patterns of Import Protection and Relative
Prices
Any attempt to evaluate regional economic liberalization must begin
with a clear appraisal of existing barriers to trade as well as price differentials
that arise from these and other sources. Most general equilibrium studies of
trade reform or liberalization focus on the removal of ad valorem-equivalent
price distortions against imports.3 This is also the primary focus in the present
study, and in this section we summarize the estimates of North American
protection levels used to calibrate our AGE model."
In addition to tariffs, a wide variety of other impon restraints exert them-
selves upon bilateral trade flows in Nonh America. Nontariff barriers (NTBs)
to imports include a variety of real and implicit (contingent) quantity con-
straints, content requirements, mles of origin, and supervisory measures such
as registration and inspection requirements. In a separate paper, Roland-Holst,
Reinert, and Shiells (1992) have estimated the composite ad valorem effect of
these trade barriers within North America, and part of these results are pre-
sented in Table 2.4. Our estimates are a composite of three sources: the ob-
served sectoral tariff collection rates in the 1988 North American SAM. in-
dependent sectoral estimates by other researchers, and the combined
UNCTAD-GATT data base of four-digit SFTC trade control measi
latter containing infonnation up through 1989. Table 2.4 details two protection
levels for each trade flow, tariffs and the estimated composite (tariff and non-
tarifQ ad valorem import price distortion.