Accumulating Trade Costs and Competitiveness in Global Value Chains
This paper examines the implications of trade costs, including applied tariffs, transportation and insurance costs, on competitiveness at industry, national and global levels, and identifies where trade facilitation investment would have the highest social returns from the perspective of global value chains (GVCs). With trade costs amplified along GVCs, profitability of individual business operations are affected by incurred transaction expenses. The authors conclude that direct benefits of trade facilitation will be higher for countries that are not yet well integrated into international trade, but key traders who are at the core of GVCs also stand to gain much.
Author: Antonia Diakantoni, Hubert Escaith, Michael Roberts and Thomas Verbeet
Tags: Trade, Tariff, Transport, Trade Facilitation, Global Value Chains