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Trade costs in the India-Mekong Subregion: Identifying Policy Priorities for Trade Facilitation

  • Yann Duval

    ()

  • Chorthip Utoktham

    ()

    (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP))

This paper explores the trade facilitation performance of India and Mekong countries using a new measure of bilateral comprehensive trade costs, complemented by a review of specific trade policy and trade facilitation-related indicators. A model of comprehensive trade costs is then developed and estimated using these specific indicators in an effort to identify policies and measures that have a significant effect on trade costs, and to prioritize them. The trade costs between India and Mekong countries are found to be high: from 20% to 100% higher than those prevailing among Mekong countries. However, the fact that India, China, Thailand, and most of the other India-Mekong countries made more progress in reducing trade costs with each other than with developed countries - such as Japan and the USA - is encouraging, showing signs of slow but steady improvements in regional connectivity. Econometric results suggest that countries should prioritize policies aimed at further developing maritime and ICT services to reduce trade costs.

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Paper provided by United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) in its series Working Paper Series with number 411.

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Length: 25 pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:unt:wpaper:swp411
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  1. Jacks, David S. & Meissner, Christopher M. & Novy, Dennis, 2011. "Trade booms, trade busts, and trade costs," Journal of International Economics, Elsevier, vol. 83(2), pages 185-201, March.
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  3. Yann Duval & Chorthip Utoktham, 2010. "Intraregional Trade Costs in Asia-A Primer," Working Paper Series 110, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), revised Jan 2011.
  4. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, 06.
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  8. Fink, Carsten & Mattoo, Aaditya & Neagu, Ileana Cristina, 2001. "Trade in international maritime services : how much does policy matter?," Policy Research Working Paper Series 2522, The World Bank.
  9. Shepherd, Ben, 2010. "Trade costs and facilitation in APEC and ASEAN: Delivering the goods?," MPRA Paper 21531, University Library of Munich, Germany.
  10. Novy, Dennis, 2008. "Gravity Redux : Measuring International Trade Costs with Panel Data," The Warwick Economics Research Paper Series (TWERPS) 861, University of Warwick, Department of Economics.
  11. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
  12. Natalie Chen & Dennis Novy, 2009. "International Trade Integration: A Disaggregated Approach," CESifo Working Paper Series 2595, CESifo Group Munich.
  13. Emanuele Breda & Rita Cappariello & Roberta Zizza, 2007. "Vertical Specialisation in Europe: Evidence from the Import Content of Exports," Rivista di Politica Economica, SIPI Spa, vol. 97(3), pages 189, May-June.
  14. Jacks, David S. & Meissner, Christopher M. & Novy, Dennis, 2010. "Trade costs in the first wave of globalization," Explorations in Economic History, Elsevier, vol. 47(2), pages 127-141, April.
  15. Dennis, Allen & Shepherd, Ben, 2007. "Trade costs, barriers to entry, and export diversification in developing countries," Policy Research Working Paper Series 4368, The World Bank.
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