Regulatory Dissimilarity: A First Look at the Newly Collected Non-Tariff Measure Database

Abstract

In this paper we construct a dissimilarity indicator to measure the degree to which a product may face different sets of regulations in two countries (the export country and the import country). Since the indicator is highly scalable, we can also construct the difference in regulations applied at the sector or country levels. In this study, we mainly utilize country-level information to compare regulatory regimes across countries to see how much a country’s set of regulations differs from the global norm. We also use this indicator to suggest a way to approach regulatory harmonisation in various regional integration efforts in East Asia. This allows us to identify which country can serve as a benchmark for regulatory harmonisation, by allowing countries to negotiate around a base set of regulations. This approach provides more concrete policy guidance on the issue of regulatory harmonisation compared to the tariff-equivalent approach.