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trade protection

How to measure trade protection?

Caroline Freund's picture

What is the best single measure of a country’s import tariffs? As we know, countries don’t have a single tariff, but a landscape of tariffs and other trade barriers. For comparison purposes, it is useful to distill the array of tariffs down to a single number.

In terms of tariffs, there are two common ones: the simple average Most Favored Nation (MFN) applied tariff and the weighted average MFN applied tariff. (MFN is the tariff that WTO members and other favored partners receive.) Neither is perfect.