Assessing the Impact of Nontariff Measures on Imports and Overall Protection in OIC

The paper discusses the decline in tariffs and the increasing use of nontariff measures (NTMs) in countries constituting the Organization of Islamic Cooperation (OIC). The paper calculates frequency ratios (number of imports subject to NTMs), coverage ratios (Import value subject to NTMs), tariff equivalent (AVEs) of NTMs, and overall protection (protection provided by tariff and AVEs) for the years 1997 to 2015. The analysis shows that the usage of NTMs has increased in recent decades. More than 50 percent of trade in most countries was subject to NTMs as of 2015. The AVEs of NTMs and overall protection have increased with a significant decline in simple average effectively applied tariff. As a result, NTMs evolved into a dominant source of overall protection. The protection given by AVEs has increased from 35 percent in 1997 to 71 percent in 2015. The paper recommends the OIC members to review and simplify the use of NTMs and harmonize with trading partners.