Trade Policy Reversion: Quantifying the Diversionary Impact of Non-Tariff Barriers on Bilateral Trade Flows (2015–2024)

Article DOI: https://doi.org/10.57017/jaes.v20.4(90).05

Author(s):

Lidiia PASHCHUK Department of International Economics, Taras Shevchenko National University of Kyiv, Ukraine
Nina LVOVA Department of Regional Economic Systems Development State Organization “Institute of Market and Economic & Ecological Researches National Academy of Sciences of Ukraine,” Odessa, Ukraine
Olena ZAVHORODNIA Department of International Economics and Social-Humanitarian Disciplines, Ukrainian State University of Science and Technologies, Dnipro, Ukraine
Vitalii ZHMURENKO Department of International Economics and Social-Humanitarian Disciplines Ukrainian State University of Science and Technologies, Dnipro, Ukraine
Nataliia RUNCHEVA Department of Economics, Hotel-Restaurant and Tourism Business, Bogdan Khmelnitsky Melitopol State Pedagogical University, Melitopol, Ukraine

Abstract:

In recent years, protectionism has become a hallmark of the global economy and international trade. This study quantifies the measurable impact of tariff and non-tariff barriers on bilateral trade flows among 30 major economies from 2015 to 2024. Employing a panel data gravity model, the paper specifies the logarithm of bilateral trade flows as the dependent variable, with average tariff rates and a non-tariff measures (NTM) index as key explanatory variables, while controlling for GDP, exchange rate volatility, distance, and trade agreements. Estimations are performed using fixed-effects and instrumental-variable approaches to address potential endogeneity and unobserved heterogeneity.

The empirical results reveal that a one-percentage-point increase in tariffs reduces bilateral trade flows by 0.12%, while a 0.1-point rise in the NTM index lowers trade by 3.5%, confirming the diversionary effects of modern protectionism. The findings demonstrate that regulatory protectionism exerts stronger trade-restrictive effects than traditional tariffs, particularly in technology-intensive sectors. Policymakers are urged to design adaptive trade strategies that preserve national competitiveness while maintaining open global trade channels to ensure sustainable growth.

Copyright© 2025 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.

Article’s history: Received 25th of October, 2025; Received in revised form 19th of November, 2025; Accepted 12th of December, 2025; Available online: 30th of December, 2025. Published as article in the Volume XX, Winter, Issue 4(90), December, 2025.

How to cite:

Pashchuk, L., Lvova, N., Zavhorodnia, O., Zhmurenko, V., & Runcheva, N. (2025). Trade Policy Reversion: Quantifying the Diversionary Impact of Non-Tariff Barriers on Bilateral Trade Flows (2015–2024). Journal of Applied Economic Sciences, Volume XX, Winter, Issue 4(90), 717–730. https://doi.org/10.57017/jaes.v20.4(90).05

Acknowledgments/Funding: The authors declare that they have no acknowledgments to make and did not receive any funding for conducting this research.

Conflict of Interest Statement: The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Data Availability Statement: The data that support the findings of this study are available from the corresponding author upon reasonable request.

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