BizCLIR

Author (s):

USAID

Date:

March 2007

Publication (if applicable):

N/A

Abstract (if Available):

How does time affect trade, what costs does it impose, and how can we measure those costs in dollars? This study addresses each of these questions. For goods subject to rapid depreciation and uncertain demand, rapid delivery is especially important; for bulk commodities and simple manufactures it is less so. Yet overall, the rising share of air cargo in world trade over less expensive ocean shipping shows that timely delivery is increasingly important. Trade is shifting toward highly time-sensitive, complex manufactures, and production is increasingly segmented across countries and continents.

Data on time in trade is abundant. The World Bank's Doing Business reports measure the time required to import and export in 175 countries. Trading across borders, for example, takes longer in developing countries than in developed ones for a number of reasons, including the quality of infrastructure, procedural coordination, and corruption. But what precisely are the costs for importers and exporters? When time costs are expressed in days rather than dollars, this question is hard to answer. To answer it, we present a method for expressing time costs in ad-valorem, or "tariff equivalent," terms.

URL:

http://staging.bizclir.browsermedia.com/galleries/publications/Calculating%20Tariff%20Equivalents%20for%20Time%20in%20Trade.pdf