Trade Policy, Trade Costs, and Developing Country Trade

Bernard Hoekman and Alessandro Nicita

No 4797, Policy Research Working Paper Series from The World Bank

Abstract: This paper briefly reviews new indices of trade restrictiveness and trade facilitation that have been developed at the World Bank. The paper also compares the trade impact of different types of trade restrictions applied at the border with the effects of domestic policies that affect trade costs. Based on a gravity regression framework, the analysis suggests that tariffs and non-tariff measures continue to be a significant source of trade restrictiveness for low-income countries despite preferential access programs. This is because the value of trade preferences is quite limited: a new measure of the relative preference margin developed in the paper reveals that this is very low for most country-pairs. Most countries with very good (duty-free) access to a market generally have competitors that have the same degree of access. The empirical analysis suggests that measures to improve logistics performance and facilitate trade are likely to have the greatest positive effects in expanding developing country trade, increasing the trade impacts of lowering remaining border barriers by a factor of two or more.

Keywords: Tariffs; nontariff measures; trade facilitation; logistics; economic development; Doha Round (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2008-12-01
New Economics Papers: this item is included in nep-dev and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (58)

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Journal Article: Trade Policy, Trade Costs, and Developing Country Trade (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:4797

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