Why Trade Costs Matter?

Prabir De ()
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Prabir De: Research and Information System Developing Countries

No 706, Working Papers from Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada.

Abstract: Trade costs are often cited as an important determinant of the volume of trade. A growing literature has documented the negative impact of trade costs on the volume of trade. Most of these studies show that integration is the resultant of reduced costs of transportation in particular and other infrastructure services in general. Direct evidence on border costs shows that tariff barriers are now low in most countries across the world. Poor institutions and poor infrastructure penalize trade, differentially across countries. Therefore, today’s trade strategy goes beyond the traditional mechanisms of tariffs and quotas and includes “behind-the-border” issues, such as the role of infrastructure and governance in supporting a well-functioning trading economy.

Keywords: Trade Costs; Trade Facilitation (search for similar items in EconPapers)
JEL-codes: F1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2006-04
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Published in ARTNeT website

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