TRADE FACILITATION AND THE MEASUREMENT OF TRADE COSTS

2010 ◽  
Vol 01 (01) ◽  
pp. 145-163 ◽  
Author(s):  
RICHARD POMFRET ◽  
PATRICIA SOURDIN
Keyword(s):  
Trade Costs ◽  
Border Effect ◽  
Trade Facilitation ◽  
Aggregate Measure

As tariffs and non-tariff barriers (NTBs) fall attention has shifted to trade facilitation, both in the WTO and in regional arrangements such as ASEAN or APEC. Economists have, however, been slow to develop convincing measures of trade costs. Commonly cited estimates of the border effect or of trade costs are huge, but flawed. The gap between CIF and FOB values of trade is the best aggregate measure, but suffers from lack of consistent data. This paper reviews evidence in the literature based on US and Australian import data, extends the sample to include data from Chile and Brazil and concludes that inferences about trade costs are fairly robust across various countries' import datasets.

MEASURING LONG-TERM COMMODITY-LEVEL TRADE COSTS: THE CASE OF ASIA

2012 ◽  
Vol 03 (02) ◽  
pp. 1250014
Author(s):  
SHINTARO HAMANAKA ◽  
ROMANA DOMINGO
Keyword(s):  
Developing Country ◽  
World Bank ◽  
Trade Costs ◽  
Trade Facilitation ◽  
Doing Business ◽  
The World Bank ◽  
The World ◽  
Business Data

Despite its several inherent weaknesses, Doing Business compiled by the World Bank is still the most widely used assessment of the trade facilitation status among developing country policymakers as well as economists. In this paper, we suggest that the use of trade costs calculated based on trade statistics in conjunction with Doing Business data is helpful in drawing up sector-specific trade facilitation policies. Unlike Doing Business, we can obtain long-term commodity-level trade costs if trade statistics are used.

Can Multistage Production Explain the Home Bias in Trade?

2010 ◽  
Vol 100 (1) ◽  
pp. 364-393 ◽  
Author(s):  
Kei-Mu Yi
Keyword(s):  
International Trade ◽  
Home Bias ◽  
Trade Costs ◽  
Significant Fraction ◽  
Empirical Literature ◽  
Vertical Specialization ◽  
Border Effect ◽  
Transport Costs ◽  
Production Stage ◽  
Multistage Production

A large empirical literature finds that there is too little international trade and too much intranational trade to be rationalized by observed international trade costs, such as tariffs and transport costs. This paper investigates whether a model in which the nature of production can change in response to trade costs—a framework with multistage production—can better explain the home bias in trade. The calibrated model can explain about two-fifths of the Canada border effect, about two-and-one-half times that of a model with one production stage. The model also explains a significant fraction of Canada-US “back-and-forth,” or vertical specialization, trade. (JEL F11, F13, F14)

scholarly journals Next-generation Trade Facilitation for Asian Integration: Cross-border Paperless Trade

2019 ◽  
Vol 1 (1) ◽  
pp. 11-31
Author(s):  
Y. Duval ◽  
T. Wang ◽  
C. Utoktham ◽  
A. Kravchenko
Keyword(s):  
Trade Costs ◽  
Next Generation ◽  
Trade Facilitation ◽  
Jel Codes ◽  
Framework Agreement ◽  
Cross Border ◽  
The Pacific ◽  
Asian Integration ◽  
Trade Measures ◽  
Made In

Reducing trade costs is essential to achieve Asian integration. Trade costs in the Asian and the Pacific region remain high, in particular, between different Asian subregions. Significant progress has been made in implementation of trade facilitation measures between 2015 and 2017, particularly those included in the World Trade Organization (WTO) Trade Facilitation Agreement (TFA). However, progress in implementing of next-generation digital trade facilitation measures, such as cross-border paperless trade measures, has been more limited. Simulation results suggest that full implementation of such measures could nearly double trade costs reductions expected from WTO TFA implementation. A new regional United Nations (UN) treaty, the Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific, may accelerate progress in this area. JEL Codes: F13, F15, F17

scholarly journals Why trade facilitation matters to Africa

2009 ◽  
Vol 8 (3) ◽  
pp. 379-416 ◽  
Author(s):  
ALBERTO PORTUGAL-PEREZ ◽  
JOHN S. WILSON
Keyword(s):  
Developing Countries ◽  
Gravity Model ◽  
Economic Crisis ◽  
Trade Costs ◽  
Trade Flows ◽  
African Countries ◽  
Trade Expansion ◽  
Trade Facilitation ◽  
The Impact

AbstractMitigating the impact of the economic crisis will require using all the tools necessary to regain a sustainable path to growth. This includes measures to support trade expansion, including in developing countries, such as those in Africa. This paper provides context for understanding why trade facilitation and lowering trade costs matter to Africa both today and over the long term. Trade costs are higher in Africa than in other regions. Using gravity-model estimates, the authors compute ad-valorem equivalents of improvements in trade indicators for a sample of African countries. The evidence suggests that the gains for African exporters from cutting trade costs half-way to the level of Mauritius has a greater effect on trade flows than a substantial cut in tariff barriers. As an example, improving logistics so that Ethiopia cuts its costs of trading a standardized container of goods half-way to the level in Mauritius would be roughly equivalent to a 7.6% cut in tariffs faced by Ethiopian exporters across all importers.

What Drive Trade Costs? South Asia and Beyond

2020 ◽  
Vol 21 (2) ◽  
pp. 258-280
Author(s):  
Mamta Kumari ◽  
Nalin Bharti
Keyword(s):  
South Asia ◽  
Financial Development ◽  
South Asian ◽  
Regional Integration ◽  
Statistical Tests ◽  
Trade Costs ◽  
Asia Pacific ◽  
Global Integration ◽  
Regional Trade ◽  
Trade Facilitation

Higher trade costs in developing countries have received enormous attention during the recent past. In this context, it is imperative to revisit the factors contributing to such higher trade costs. This article attempts to explore the major determinants of trade costs conceptually and empirically. Further, the study endeavours to solve the puzzle of higher trade costs in the South Asian perspective. Using panel data of 93 countries from 2007 to 2015, the study tends to uncover major determinants of trade costs between South Asian countries and their two proximate regional blocks, namely Asia-Pacific Economic Cooperation (APEC) and Association of Southeast Asian Nations (ASEAN). In estimating the model, the study prefers to use fixed-effect estimation technique, owing to the results of statistical tests carried out to choose the most appropriate model for the estimation. The findings of the study reveal that trade facilitation, political corruption and financial development affect intra-regional trade costs of South Asia significantly. Trade facilitation influences trade costs between South Asia and ASEAN. Moreover, trade facilitation and financial development affect trade costs between South Asia and APEC. The diagnoses of South Asian intra and inter-regional trade costs can push forward ongoing efforts at unlocking the potential of regional integration as well as global integration of the region.

scholarly journals Trade Effects of Customs Reform: Evidence from Albania

2019 ◽  
Author(s):  
Ana Margarida Fernandes ◽  
Russell Hillberry ◽  
Alejandra Mendoza Alcántara
Keyword(s):  
International Trade ◽  
Trade Costs ◽  
Compelling Evidence ◽  
Clearance Time ◽  
Direct Proportion ◽  
Academic Interest ◽  
Trade Facilitation ◽  
Estimation Strategy ◽  
Time Uncertainty ◽  
Trade Effects

Abstract Despite enormous academic interest in international trade costs and keen policy interest in efforts to reduce them, little is known about the effects of trade facilitation measures. This study evaluates a significant Albanian reform that sharply reduced physical inspections of import shipments. An estimation strategy that isolates quasi-random variation in the allocation of shipments to physical inspections is used to show that reduced inspections significantly increase imports. Import flows that are observed least frequently see the largest trade responses to reduced inspections. The effect of inspections on imports is virtually independent of changes in clearance time and clearance time uncertainty. Tariff and other tax revenues collected at the border rise in direct proportion to growth in declared import value. There is no compelling evidence that reduced inspections increase evasive behavior, perhaps because most of Albania's imports are tariff-free.

Intranational Trade Diversion, the Canada-United States Free Trade Agreement, and the L Curve

2004 ◽  
Vol 4 (1) ◽  
Author(s):  
Serge Coulombe
Keyword(s):  
International Trade ◽  
Data Model ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Trade Diversion ◽  
Trade Costs ◽  
Border Effect ◽  
Canadian Provinces ◽  
The Impact ◽  
Comparative Evolution

Abstract This paper provides an empirical analysis of the comparative evolution of intranational and international trade in the Canadian provinces since 1981. We establish a striking empirical fact, the L curve, that characterizes the comparative evolution of intranational (interprovincial) and international trade shares to GDP between 1981 and 2000. We also use a panel data model to evaluate the impact of changing trade costs induced by the CUSFTA on the intensity of international and interprovincial trade. The analysis casts doubt on the intranational trade diversion hypothesis, common in trade models such as the structural gravity model of Anderson and van Wincoop (2003) that was used recently to revisit the Canada–U.S. border effect. International trade appears to complement rather than substitute for interprovincial trade.

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