Non-price Factors in CASA Trade: Exploring the Relevance of Trade Costs

Nassir Wani

Chapter Chapter 5 in Trade and Development in Central and South Asia, 2025, pp 101-120 from Springer

Abstract: Abstract The Central Asian and South Asian (CASA) economies are experiencing an escalation in trade costs, visible at the border crossings and domestically too. The need for trade documentation for exports and business process registration influences the scale and composition of exports, amplifying transaction costs and thereby reducing overall exports. This study assumes the export of two types of products, namely, differentiated and homogeneous, and employs data from the UNESCAP-World Bank’s bilateral comprehensive trade costs database to ascertain the impact of trade costs. The findings of the impact, however, vary across commodities depending on the extent of product diversity. The findings reveal that in the case of diversified products, the absence of price data because of unpredictability leads to vulnerability to export signatures. The regression results demonstrate that each extra signature reduces overall exports by 4.3% and is akin to raising the importer’s duty by 5 percentage points. Furthermore, the impact of each extra signature diminishes exports of differentiated commodities by an extra 4–5% relative to exports of homogeneous commodities, while the firm registration procedures only affect differentiated products. The role of non-tariff barriers also accounts for up to 90% of trade costs, and therefore, in CASA, interregional trade costs surpass those of intraregional trade. The proliferation of permits, licences, and certificates affects both the global and regional competitiveness of firms in these regions and leaves small businesses unable to navigate the complexities of these rules. Moreover, stockpiles of sensitive and restricted goods intended to protect local producers sometimes contradict the realms of intra-industry trade opportunities, as in the case where ad valorem duties for agricultural commodities often receive far higher protection than those on non-agricultural products, hindering regional economic progress. In CASA, Central Asia and Afghanistan are ranked among the lowest 3% internationally for cross-border trade facilitation. Tackling these trade costs is not only an economic imperative but also a crucial measure to unleash regional trade prospects that may promote cooperation, improve market access, and ultimately propel forward equitable growth in these strategically crucial regions.

Keywords: Non-price factors; Trade costs; CASA; Tariffs and trade facilitation; F10; F13; F15; F19 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-95-2728-1_5

Ordering information: This item can be ordered from
http://www.springer.com/9789819527281

DOI: 10.1007/978-981-95-2728-1_5

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().