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Transport Costs and Economic Integration in the Americas

Azita Amjadi, L. Winters and Alexander Yeats

Swiss Journal of Economics and Statistics (SJES), 1995, vol. 131, issue III, 465-488

Abstract: We discuss three models from the literature in which transportation costs play a critical role in evaluating international economic integration. One considers costs on intra-bloc trade, one those of extra-bloc trade, and one the relativity of the two. We then examine estimates of the actual transportation costs on Latin American exports to the United States. These are significant - generally higher than trade barriers - and are higher on Latin American exports than European exports. The paper concludes that transportation costs do not provide a strong incentive for integration in the Americas, and that reducing such costs could be an important complement to integration.

Date: 1995
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