in Table 1), the sector-level tariff of 25.8 percent on “food and tobacco” excludes that specific beverage group from calculating the average.<sup>11</sup> Because of the more speculative nature of estimation of NTB equivalents, we concentrate here on the ERPs in Table 5a using applied tariff and information on energy subsidies. There are a many interesting results in Table 5a, but we will focus on a few that raise relevant policy issues. Note first that the dispersion of nominal protection on tradables is not very high, the levels of tariffs ranging between zero on fertilizers to 25.8% on food, with an average of 8 percent. The sectors with the relatively highest tariffs are food and tobacco, textiles, aluminum products, other industries and non-metal industries, in that order. Despite the relatively low dispersion of nominal tariffs, the effective rates of protection have a very wide range, from high positive to high negatives. Excluding the three sectors with negative value added in the absence of intervention, the standard deviation of total ERPs is 373 percent in comparison to an average of 190 percent. Note that most of the dispersion and most of the average is due to tariffs and output subsidies, not the energy subsidies. The average ERP due to energy subsidies over these 20 sectors is 53 percent with a standard deviation of 82 percent.

It is interesting to compare these results with those of D. Lederman’s draft report of 2007. As seen in Annex Table 2, he used a different breakdown of 21 aggregated sectors, focusing on downstream, natural resource sectors, (e.g., separating food, from tobacco, from beverages, including wood and paper as separate sectors, subdividing agriculture into two subsectors, and explicitly including cotton). In addition, given the level of cost share detail available, Lederman could not adjust cost share coefficients for border prices and no subsidies, importantly energy subsidies. This implies that the factor costs as shares of gross output (the denominator in the ERP formula) would differ between Lederman’s approach and that of the present study. For example, for non-metal industries, Lederman reports factor costs as a share of gross output equal to 72 percent, while this present study finds this share in the absence of intervention equal to 42 percent.

Therefore, when there is an overlap between studies in the aggregated sectors, some of the ERPs estimates in this present study differ considerably from those of Lederman. For example, for textiles, although he reports similar levels of applied product tariffs, Lederman finds an ERP of 95.6 percent (84 percent, without subsidies), while this present study finds a total ERP of about 20 percent (and a slightly negative ERP due only to tariffs and output subsidies). For non-metal industries, Lederman finds a total ERP of 23.6 percent, and this present study finds 3 percent. In the case of agriculture, however the Lederman ERPs are similar to those of the present study. Both studies report similar applied nominal tariffs, high ERPs for many sectors, high dispersions of ERPs across sectors, and both find that energy subsidies in some sectors contribute significantly to total ERPs.

As discussed in the previous section, there are tradable sectors which have high and negative ERPs because the value added without intervention is _negative_ ( _VgH_ < 0). That is, without the total package of interventions, these activities would be replaced by

> 11 In comparing the results in this study to those of Lederman (2005) , an additional source of differences in the ERPs is due to the inclusion of alcoholic beverages in the Lederman results, which raises average tariffs in his Beverages sector to over 1600 percent.

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