MEASUREMENT OF INTERNATIONAL TRADE BARRIERS
MEASUREMENT OF INTERNATIONAL TRADE BARRIERS

Summary/Abstract: Barriers to international trade impede the free flow of goods and services, leading to increased production by relatively inefficient firms, thereby reducing the overall economic well-being of societies. While the globalization of the world’s economies has seized the attention of policymakers, the media, and economists, researchers have recently collected a great deal of evidence that indicates that barriers to trade remain quite high. The types and magnitudes of these barriers in developed countries are highlighted in an important recent article by James Anderson and Eric van Wincoop. Combining the results from current research on trade costs, Anderson and van Wincoop find that border barriers and international transport costs are equivalent to a 74 percent tax on the factory gate price — 74 percent seems like a high number; imagine a sales tax that high!

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