Domestic Trade and Transportation Costs as Barriers to International Trade

Donald Rousslang and Ted To

Canadian Journal of Economics, 1993, vol. 26, issue 1, 208-21

Abstract: Available evidence indicates that costs of nontraded services in domestic transportation, wholesaling, and retailing (domestic margins) are higher if a good is shipped in international trade than if it is shipped from domestic producers to domestic consumers. Consequently, domestic margins appear to act as natural barriers to trade in the same manner as international transp ort costs do. This paper presents estimates of the barriers that the domestic margins impose against U.S. imports and shows that they exc eed the barriers imposed by tariffs and international transport costs combined.

Date: 1993
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