Reducing Trade Costs in East Africa : Deep Regional Integration and Multilateral Action

There is substantial evidence that with the progressive global decline in tariffs over several decades, trade costs are a more significant barrier to trade than tariffs, especially in Sub-Saharan Africa. This paper decomposes trade costs into three...

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Main Authors:	Balistreri, Edward J., Tarr, David G., Yonezawa, Hidemichi
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank Group, Washington, DC 2014
Subjects:	BUSINESS SERVICE COSTS GLOBAL TRADE MODEL LIBERALIZATION OF BARRIERS NONTARIFF BARRIERS TARIFFS TRADE COSTS TRADE FACILITATION
Online Access:	http://documents.worldbank.org/curated/en/2014/09/20250345/reducing-trade-costs-east-africa-deep-regional-integration-multilateral-action http://hdl.handle.net/10986/20367

id	okr-10986-20367
recordtype	oai_dc
spelling	okr-10986-203672021-04-23T14:03:55Z Reducing Trade Costs in East Africa : Deep Regional Integration and Multilateral Action Balistreri, Edward J. Tarr, David G. Yonezawa, Hidemichi BUSINESS SERVICE COSTS GLOBAL TRADE MODEL LIBERALIZATION OF BARRIERS NONTARIFF BARRIERS TARIFFS TRADE COSTS TRADE FACILITATION There is substantial evidence that with the progressive global decline in tariffs over several decades, trade costs are a more significant barrier to trade than tariffs, especially in Sub-Saharan Africa. This paper decomposes trade costs into three categories: costs that can be lowered by trade facilitation, nontariff barriers, and the costs of business services. The paper develops a 10-region, 18-sector, global trade model that includes Kenya, Tanzania, Uganda, and Rwanda of the East African Customs Union. The analysis finds that deep integration in the East African Customs Union that lowers these trade costs results in significant gains for the four countries, especially from improved trade facilitation. Extending the lowering of nontariff barriers and services liberalization multilaterally would increase the gains between two and seven times, depending on the country. that the analysis also finds that reducing nondiscriminatory services barriers in Kenya and Tanzania would increase welfare even more than multilateral reduction of discriminatory services barriers. The paper is innovative both conceptually and empirically. It contains foreign direct investment in services and is the first paper to numerically assess liberalization of barriers against domestic and multinational service providers in a multi-sector, multi-region, applied general equilibrium model. The paper uses new databases of the ad valorem equivalents of barriers in services and the time in trade costs. Both databases are shown to be important to the results. 2014-10-06T20:13:40Z 2014-10-06T20:13:40Z 2014-09 http://documents.worldbank.org/curated/en/2014/09/20250345/reducing-trade-costs-east-africa-deep-regional-integration-multilateral-action http://hdl.handle.net/10986/20367 English en_US Policy Research Working Paper;No. 7049 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Group, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Africa East Africa Sub-Saharan Africa Kenya Rwanda Tanzania Uganda
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	BUSINESS SERVICE COSTS GLOBAL TRADE MODEL LIBERALIZATION OF BARRIERS NONTARIFF BARRIERS TARIFFS TRADE COSTS TRADE FACILITATION
spellingShingle	BUSINESS SERVICE COSTS GLOBAL TRADE MODEL LIBERALIZATION OF BARRIERS NONTARIFF BARRIERS TARIFFS TRADE COSTS TRADE FACILITATION Balistreri, Edward J. Tarr, David G. Yonezawa, Hidemichi Reducing Trade Costs in East Africa : Deep Regional Integration and Multilateral Action
geographic_facet	Africa East Africa Sub-Saharan Africa Kenya Rwanda Tanzania Uganda
relation	Policy Research Working Paper;No. 7049
description	There is substantial evidence that with the progressive global decline in tariffs over several decades, trade costs are a more significant barrier to trade than tariffs, especially in Sub-Saharan Africa. This paper decomposes trade costs into three categories: costs that can be lowered by trade facilitation, nontariff barriers, and the costs of business services. The paper develops a 10-region, 18-sector, global trade model that includes Kenya, Tanzania, Uganda, and Rwanda of the East African Customs Union. The analysis finds that deep integration in the East African Customs Union that lowers these trade costs results in significant gains for the four countries, especially from improved trade facilitation. Extending the lowering of nontariff barriers and services liberalization multilaterally would increase the gains between two and seven times, depending on the country. that the analysis also finds that reducing nondiscriminatory services barriers in Kenya and Tanzania would increase welfare even more than multilateral reduction of discriminatory services barriers. The paper is innovative both conceptually and empirically. It contains foreign direct investment in services and is the first paper to numerically assess liberalization of barriers against domestic and multinational service providers in a multi-sector, multi-region, applied general equilibrium model. The paper uses new databases of the ad valorem equivalents of barriers in services and the time in trade costs. Both databases are shown to be important to the results.
format	Publications & Research :: Policy Research Working Paper
author	Balistreri, Edward J. Tarr, David G. Yonezawa, Hidemichi
author_facet	Balistreri, Edward J. Tarr, David G. Yonezawa, Hidemichi
author_sort	Balistreri, Edward J.
title	Reducing Trade Costs in East Africa : Deep Regional Integration and Multilateral Action
title_short	Reducing Trade Costs in East Africa : Deep Regional Integration and Multilateral Action
title_full	Reducing Trade Costs in East Africa : Deep Regional Integration and Multilateral Action
title_fullStr	Reducing Trade Costs in East Africa : Deep Regional Integration and Multilateral Action
title_full_unstemmed	Reducing Trade Costs in East Africa : Deep Regional Integration and Multilateral Action
title_sort	reducing trade costs in east africa : deep regional integration and multilateral action
publisher	World Bank Group, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2014/09/20250345/reducing-trade-costs-east-africa-deep-regional-integration-multilateral-action http://hdl.handle.net/10986/20367
_version_	1764445167256862720

Reducing Trade Costs in East Africa : Deep Regional Integration and Multilateral Action

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