Asymmetric Effects of Non‐Tariff Measures: Evidence From Argentina's Automotive Value Chain

Abstract

ABSTRACT This paper examines the effects of Argentina's non‐automatic import licenses (NAILs), introduced in late 2011 to reduce the automotive trade deficit by increasing local content. Using rich product‐ and firm‐level data, we assess whether these measures curtailed imports of targeted auto parts and how they affected firm‐level trade, distinguishing between vehicle assemblers and parts manufacturers. We find only modest declines in imports, with limited evidence of import substitution, while exports fell sharply due to contractions among auto parts firms. Our results underscore the asymmetric effects of NTMs across segments of global value chains, providing timely evidence on how protectionist trade measures can unintentionally weaken export competitiveness in middle‐income economies.