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September/October 2010, 
Vol. 92, No. 5
Posted 2010-09-01

Measuring International Trade Policy: A Primer on Trade Restrictiveness Indices

Measuring the overall restrictiveness of a country’s international trade policies is important and, in fact, essential for estimating the effects of trade policies and for negotiations to reduce trade barriers. A good measure is also difficult to produce: Trade restrictiveness indices are constructed by combining the actual structure of trade restrictions, which is generally quite different across goods, into a single number. Under certain assumptions, this single number is the uniform tariff that would produce the same trade restrictiveness as the actual differentiated structure of restrictions. In this artilce, the economic intuition underlying the construction of these indices is presented and estimates of these indices and the resulting insights are summarized.