East Meets West on Trade Costs

ADBI and the Inter-American Development Bank co-organized a conference on Trade Costs and Regional Cooperation in Lima under the framework of the Latin America/Caribbean and Asia/Pacific Economics and Business Association (LAEBA) on 17–18 June 2008.

The conference addressed common issues and concerns of trade costs and regional cooperation in both Asia and Latin America/Caribbean. The objective was to examine key issues and challenges in reducing trade costs and enhancing intra- and inter-regional cooperation. Studies presented in the conference focused on analysis of policy issues through empirical and case studies at national, subregional, and regional levels. The discussion papers for Asia included:

• Trade Costs in the Greater Mekong Sub-region: A CGE¹ Approach;
• Trade Costs, Production Fragmentation, and Regional Integration in Asia;
• Trade Costs and Trade Patterns in South Asia;
• Port Competition and Coordination; and
• Transforming Trade Competition into Coordination in PRC.²

The participants agreed that expanding and improving the necessary physical and institutional infrastructure would reduce trade costs and therefore increase trade. Empirical evidence discussed in the conference suggested that the explosive growth of Asia’s exports in recent decades has been enabled by increases in the quality and quantity of trade-related infrastructure (see Figure).

View conference materials accessible via IADB website.

¹CGE = computable general equilibrium

²PRC = People's Republic of China