Decolonisation and development in Burma

Over the last decade, economists have conducted numerous studies concerning trade barriers posed by national tariffs. In spite of this interest, few comprehensive analyses of transport barriers have been attempted. This seems surprising since transport costs, like tariffs, influence the magnitudes of trade flows, and types of goods exchanged internationally.

Recent changes in United States import statistics permit estimation of the incidence of international transport and insurance charges by product and by country. Using these records, this study shows that the overall ad valorem incidence of India's transport costs is approximately 14 per cent, or more than double current MFN tariffs. However, the spread between transport charges and tariffs is greater on some products of special export interest to India.

Analysis of the transport charges by processing stages shows that these costs escalate with increased fabrication. Thus, freight costs, like “tariffs, retard the growth of processing industries in India. This, plus the fact that India is at a sizeable cost disadvantage relative to its competitors, stresses the need for policies aimed at lowering the incidence of transport costs, or directing future export ventures, to areas where the shipping cost differential is less imposing.