On February 23rd, 2023, the World Bank and the Coordinating Ministry of Economic Affairs for Indonesia, jointly launched the dataset on non-tariff measures (NTMs) in Jakarta (Figure 1). NTMs include “policy measures other than ordinary customs tariffs that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both” (UNCTAD 2022).
NTMs have become an important trade policy tool for governments to achieve policy objectives such as consumer and environmental protection in the context of increasingly sophisticated trade. Examples of measures include requiring: (i) food manufacturers to include labels of ingredients and nutritional information; (ii) pharmaceutical companies to obtain specific certifications; (iii) importers of infant formula to obtain authorization from the Ministry of Health. NTMs are heterogenous in their form, objective, and source.
In their pursuit of these goals, NTMs can affect trade significantly. As such, NTMs need to be carefully designed (Cadot and Malouche, 2012) to ensure that they achieve their intended policy objective without imposing unnecessarily high economic costs.
Why the need for the data?
Reliable and up-to-date data is vital to achieving that goal. Such data allows for the impact of NTMs to be properly analyzed, identifying measures to be streamlined, harmonized, or eliminated.
To address this need, the World Bank has created the first comprehensive time-series database of NTMs. The focus is on NTMs applied by Indonesia in the period 2008-2021. By tracking the evolution of individual NTMs month-by-month, this dataset allows users to overcome the limitations of existing datasets, which cover a snapshot of NTMs at a point in time. To that end, the team has hand-collected, compiled, and tracked individual measures building on the existing dataset built by the United Nations Conference on Trade and Development (UNCTAD) and the Economic Research Institute for ASEAN and East Asia (ERIA). Starting from this data, the team has implemented a routine for forward and backward tracing, which has enabled the creation of a panel dataset (See manual for further information). The exercise has also allowed the team to identify additional measures as well as to recode existing measures based on a coherent interpretation of the UNCTAD International Classification of NTMs (2019 Version). While the data follows UNCTAD data collection guidelines, it improves on the existing data on key aspects:
- covering a broader source base
- providing more regular updates (annual)
- customizing some measures in the data
- increasing higher time frequency (monthly)
The data is organized as a panel at the product-month-year level with the individual NTMs (and tariffs) as binary variables. The regulations for each NTM measure as well as the issuing ministry/government agency are also available in a separate NTM-product-regulation-month-year data file which serves as the basis of NTM-product-month-year panel construction. The NTM-product-regulation-month-year data contains the series (base regulations), amendments, and revoked regulations along with the product codes and NTM codes based on each regulation.
Figure 2 shows the large number of ministries that manage the regulations, emphasizing the importance of data that organizes the regulations in one place over time. Not only are the institutions applying NTMs heterogenous, but so is the nature of the regulations as well. As seen in Figure 3, the response to the COVID pandemic involved several new NTMs over a short period of time. This illustrates the advantage of a database like this one, which updates frequently the data and casts a wide net in terms of types of regulations checked.
Figure 2: Many government institutions are responsible for issuing NTMs
(Number of Active NTM Regulations by Institution)
Figure 3: COVID-19 response involved many new NTMs
(Number of new NTMs by month related to the COVID response regulations)
How can users access the data?
The regulation data, panel data, and all related documentation can be found on the World Bank Development Data Hub. Different visualization tools based on the panel data are also publicly available on WITS (World Integrated Trade Solution). The data has also been used to update the UNCTAD TRAINS (Trade Analysis Information System) Database on Indonesian NTMs and is available in the UNCTAD format on TRAINS and WITS. A detailed manual is available, and provides a comprehensive overview of the purpose, building procedures, and usage of the data for Indonesia, in hope that this can be replicated.
The potential users of the Indonesia NTM data include researchers, policymakers, governments, NGOs, etc. These audiences have different needs and will potentially consume the data in different ways.