Trade facilitation and the measurement of trade costs

As tariffs and non-tariff barriers (NTBs) fall attention has shifted to trade facilitation, both in the WTO and in regional arrangements such as ASEAN or APEC. Economists have, however, been slow to develop convincing measures of trade costs. Commonly cited estimates of the border effect or of trade costs are huge, but flawed. The gap between CIF and FOB values of trade is the best aggregate measure, but suffers from lack of consistent data. This paper reviews evidence in the literature based on US and Australian import data, extends the sample to include data from Chile and Brazil and concludes that inferences about trade costs are fairly robust across various countries' import datasets.Richard Pomfret and Patricia Sourdi

Introduction

The organizing focus of this volume is its exploration of themes associated with the multi-faceted Greek notion of politeia. Politeia is the Greek title of what the English-speaking world calls Plato’s Republic. It figures in the title of other surviving works of the fifth and fourth century bc, such as Xenophon’s Spartan Politeia, the so-called Old Oligarch’s (or ps.Xenophon) Athenian Politeia and the Aristotelian Politeia of the Athenians, in which titles the term is generally translated by ‘constitution’. It is picked up in later works such as the Politeia of Zeno of Citium and echoed in the Latin De republica of Cicero. Yet politeia as such — the meaning and range of the term — has received surprisingly little attention as a lens into ancient ideas about politics and ethics. The term’s first extant occurrence in a non-fragmentary text of known authorship is in Herodotus 9.34, where it means the condition of citizenship (its core meaning, according to Schofield 2006c: 33). By extension the term comes, in the writing of politeiai, to refer to that system of laws and practices in the civic community that constructs, educates and constrains a person’s condition of citizenship. Thus, for Aristotle, a politeia is the ‘form of life of a city (polis)’ (Pol. 4.11 1295a40, cited in Schofield 2006c: 33); for Isocrates, it is the ‘soul of the city (polis)’ (Orat. 12 (Panathenaicus), 138, cited in Bordes 1982: 128). Only secondarily is politeia a genre of writing focused on specific forms of rule or government, that is, on constitution (the most commonly used English translation of politeia) in the modern political sense.Boris Najman, Richard Pomfret and Gaël Raballandhttp://trove.nla.gov.au/work/2669048

Trade Facilitation: Defining, Measuring, Explaining and Reducing the Cost of International Trade

This up-to-date and informative book provides a comprehensive treatment of the costs of trading across borders and of trade facilitation policies. While traditional tariff and non-tariff barriers to trade have been reduced, international trade continues to involve higher costs in money and time than domestic trade. These include not only transport costs, that are determined by distance and commodity characteristics, but also at-the-border and behind-the-border costs which can be reduced by appropriate policies. Research on trade costs has flourished since the turn of the century, and this book by Patricia Sourdin and Richard Pomfret, takes stock of our increased knowledge of the nature and magnitude of trade costs, analysing why they are high and how they can be reduced to increase the gains from trade. Trade Facilitation will appeal to economists and policymakers at the national level and in multinational institutions, researchers and postgraduate students interested in international trade and trade policy, as well as students in international business.Patricia Sourdin and Richard Pomfre

Have Asian trade agreements reduced trade costs?

Paper presented at the ACAES Conference "Asian Economic Integration in a Global Context" held at the Rimini Campus of the University of Bologna, 29–31 August 2008.Regionalization of trade in East Asia increased in the 1990s, and has been accompanied by a growing number of trade agreements. The wave of trade agreements is in part a response to the need to facilitate trade in order to make regional value chains more profitable. This paper draws on a rich Australian database for the period 1990-2007, which allows us to control for distance and commodity characteristics and to identify cross-country variation in trade costs. The results, indicating the extent to which East Asian countries' trade costs have fallen over the regionalization period relative to changes in other regions' trade costs, provide evidence of the existence of effective policy steps to facilitate trade and also that these steps have multilateral as well as bilateral or regional benefits.Richard Pomfret and Patricia Sourdi

Why do trade costs vary?

As tariffs have fallen, it is apparent that trade costs are a significant obstacle to international trade and that they vary from country to country. The gap between the cif and fob value of a trade flow is a useful measure of aggregate trade costs, but only if the measure is based on a consistent volume of trade; mirror statistics are unsuitable. Using high quality Australian import data disaggregated at the HS 6-digit level, we find large country-by-country variations in trade costs. Distance, weight and size account for part of the variation in trade costs. Indicators of institutional quality pick up some of the variation in trade costs, but the relationship is not uniform across mode of transport and commodities; exporting countries’ institutional quality is more strongly related to trade costs for air freight than sea freight, and the relationship is commodity-specific and strongest for manufactured goods. Country-specific characteristics influencing trade costs provide a link between institutions and economic development.Richard Pomfret and Patricia Sourdi

Why do trade costs vary?

As tariffs have fallen, it is apparent that trade costs are a significant obstacle to international trade and that they vary from country to country. We analyse country-by-country variations in trade costs, controlling for distance and commodity composition, and using measures of corruption/institutions. Using disaggregated Australian import data, we find that exporting countries‟ institutional quality is more strongly related to trade costs for air freight than sea freight; the relationship is commodity-specific and strongest for manufactured goods. Country-specific characteristics influencing trade costs provide a link between institutions and economic development.Richard Pomfret and Patricia Sourdinhttp://www.eiit.org/EITG