protection rates that major US partners impose on US exports and US average protection rates that
the United States imposes on imports from its major partners. The weighted average rates are based on
disaggregated tariff and NTB data. The six scenarios that we consider in the partial equilibrium analysis
are as follows:
n The first scenario examines the impact of a reversion, by the United States and its 17 major
trading partners, from actual tariffs (most favored nation [MFN] applied tariffs or preferential
tariffs where applicable) to Uruguay Round bound rates.2 This scenario essentially examines
the impact over the last 10 years of multilateral, unilateral, and preferential tariff liberalization
combined.
n The second scenario evaluates the impact of a reversion by the United States and its major
partners from current actual tariffs to Tokyo Round bound rates. This scenario examines the
impact of undoing the Uruguay Round concessions and the unilateral and preferential tariff
liberalization over the last 25 years.
n The third scenario examines the impact on US trade if current transportation costs reverted to
their 1980 levels.
n In the fourth scenario we eliminate the preferential tariffs under the North American Free
Trade Agreement (NAFTA), the Australia-US FTA, and the Singapore-US FTA.3 This scenario
assumes the United States applies its MFN applied rate to all partners and that all its FTA
partners do the same for the United States.
n The fifth scenario investigates a reversion of present ad valorem tariff equivalents of NTBs
to the NTB rates prevailing in approximately 1990. Our methodology suggests a very
large decline in NTB rates since 1990, so this scenario indicates a large impact of policy
liberalization. Due to data limitations we do not consider the impact of preferential NTB
access under FTAs.4
n The sixth, and final, scenario examines the impact of reverting current US and major partner
actual tariffs to the MFN applied tariffs of approximately 1990. This scenario analyzes the
impact of unilateral and preferential tariff liberalization combined over the last 15 years.
In an attempt to estimate the costs of a failed Doha Round, Bouet and Laborde (2008) estimate
the impact of scenarios similar to ours. They find that a reversion from current MFN applied tariffs to
Uruguay Round bound rates by most countries would decrease world trade by 7.7 percent. The authors
2. The 17 trading partners that we consider throughout our analysis are: Australia, Brazil, Canada, China, the European
Union, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Mexico, the Philippines, Singapore, Taiwan, Thailand, and
Venezuela.
3. To keep the exercise manageable, we did not evaluate the effect of eliminating preferential tariffs in other US FTAs, e.g.,
the US-Chile FTA.
4. While in reality there is some easing of NTBs under US FTAs, the method used to calculate NTB tariff equivalents
by Kee, Nicita, and Olarreaga (2005), the study from where we obtain the bulk of our NTB data, does not lend itself to
differentiation of preferential NTBs from general NTBs. The method uses shortfalls in expected imports when NTBs are
present to calculate the restrictiveness of NTBs for every tariff line for every country analyzed.