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| Content Provider | OECD iLibrary |
|---|---|
| Organization | OECD |
| Abstract | International trade is not a seamless process. "Frictions" abound that give rise to trade costs. High trade costs effectively nullify comparative advantage by rendering exports uncompetitive. High trade costs deny firms access to technology and intermediate inputs, preventing their entry into, or movement up, global value chains. High trade costs also erode consumer welfare narrowing the range of good and services on offer and pushing up prices. While trade costs do not alone explain the development pathways of economies, they are a major factor explaining why some countries are unable to grow and diversify. The range of policies that affect trade costs is broad. Although trade costs are ubiquitous, they are not immutable. Action can, and is, being taken to reduce trade costs. Policy reforms are yielding positive impacts, although these cannot be assumed, with research suggesting that the lowest income countries stand to gain the most from enacting such reforms. Much work remains to be done to reduce trade costs further and integrate countries more completely into the global economy, but there are positive reasons to believe that developing countries and their partners are taking this issue seriously. |
| Page Count | 26 |
| Starting Page | 35 |
| Ending Page | 60 |
| Language | English |
| Publisher | OECD Publishing |
| Publisher Date | 2015-06-30 |
| Access Restriction | Open |
| Subject Keyword | Development Trade |
| Content Type | Text |
| Resource Type | Chapter |
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