mapping from ICS codes to any product or industry classification system.<sup>17</sup> I deal with this issue by proposing a concordance between 5-digit ICS codes (ICS5) and SIC4 industries. The construction of this mapping involves a three-step procedure. First, I obtain the 10 digit HS codes (HS10) within each SIC4 industry from Pierce and Schott (2009). Second, I search the PERINORM database<sup>18</sup> —the source dataset for the EUESDB— and tabulate the ICS5 codes associate with the set of HS6 codes within each SIC4 industry. Third, I tabulate standards by those ICS5 codes in the PERINORM dataset and select the ICS5 codes whose standards are actually related to the industry into which they were classified in step two. “Terminology” or “vocabulary” standards are not taken into account. Table 3 presents this concordance and the description of the ICS codes within each industry.

The theoretical model suggests that the heterogeneity of product standards across market destinations is a barrier to trade. I define the non-harmonized share of standards for industry _i_ in year _t_ ( _NHt_<sup>_i_)—aproxyforthisNTBmeasure—asthenumberofCENELECstandardsthat</sup> are not “identical” to an existing IEC standard as a share of the total number of standards in each SIC4 industry. I also compute the tariff rate for industry _i_ in year _t_ ( _τt_<sup>_i_)astheweighted</sup> average rate across all 6-digit HS products within each SIC4 industry, using EU’s import value from the U.S. as weights. For some products, tariffs were binding to zero by year 2000 due to the Information Technology Agreement (ITA), which is a tariff cutting mechanism enforced by the WTO between nations accounting for at least 90 percent of world IT trade. These zero-tariff bindings were on an MFN basis and thus available to exports from any other WTO member country.

Table 4 reports average tariff and non-tariff trade costs across SIC4 industries for five-year interval from 1992 to 2002. European tariff rates decline across a broad range of industries over time in the Electronic sector. Indeed, over the entire period, tariffs were halved for approximately 40 percent of industries. The rate of tariff declines, however, varies substantially across industries. According to the directives laid down by the Lugano and the Dresden agreements, European product standards have progressively been harmonized to international norms. The decline in the non-harmonized share of standards also differs across industries. The highest reduction is among industries producing household appliances, including cooking equipment, refrigerators, laundry equipment, and vacuum cleaners.

In addition to being a good match to the theory, the trade costs constructed here have several advantages. First, they are derived directly from a database used by firms to document the regulation requirements to export to the European Union. Second, they vary across industries and time. Even with these advantages, some caveats should be noted. First, the EUESDB does not

> 17Blind (2010) proposes a partial concordance from ICS codes to SITC codes. However, this bridge is too aggregate at the ICS level so individual SITC codes are mapped to a large number of ICS codes.

> 18PERINORM is a bibliographic database maintained by the British, French and German standard-setting bodies. It is designated to facilitate industry access to product standards and technical regulations.

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