Book Description

January 2001 Trade liberalization and the breakup of private carrier agreements could reduce average liner transport prices by a third and cut costs on goods carried to the United States alone by up to $3 billion. Maritime transport costs significantly impede international trade. Fink, Mattoo, and Neagu examine why these costs are so high in some countries and quantify the importance of two explanations: restrictive trade policies and private anti-competitive practices. Both matter, they find, but private anti-competitive practices have the greater impact. Trade liberalization and the breakup of private carrier agreements would lead to a reduction in average liner transport prices of a third and cost savings of up to $3 billion on goods carried to the United States alone. The policy implications are clear: not only should government policy be further liberalized, but there should be stronger international disciplines on restrictive business practices. Fink, Mattoo, and Neagu propose developing such disciplines in the current round of services negotiations at the World Trade Organization. This paper--a product of Trade, Development Research Group--is part of a larger effort in the group to assess the implications of liberalizing trade in services. This research is supported in part by the U.K. Department for International Development. The authors may be contacted at [email protected], [email protected], or [email protected].