Trade Costs of Afghanistan With Its Major Trading Partners: Measurement and Its Determinants

Abstract

The trading expenses encountered domestically and across borders have a detrimental influence on global trade. Higher trade costs hamper trade and limit the benefits of trade liberalisation. The current research applies Novy's micro-founded trade cost measure (2013) to estimate global trade costs connected with Afghanistan, along with the factors that influence trade costs. Based on the investigation, trade in agriculture costs is significantly higher compared to the non-agricultural. As a consequence, focusing on agricultural trade facilitation would be advantageous.

Furthermore, enhancing and expediting trade facilities in trading areas are top priorities for government intervention to reduce trade costs. Focusing on free trade agreements and better shipment communication with trade partners increases transportation routes efficiently, cutting time and other expenses. The study proposes that the World Trade Organization's trade facilitation agreement be effectively implemented, administrative burdens at entry points minimised, non-tariff barriers (NTBs) be simplified and harmonised and soft infrastructures be established utilising current technologies.

Citation

Wani, N.U.H. (2024), "Trade Costs of Afghanistan With Its Major Trading Partners: Measurement and Its Determinants", Policy Solutions for Economic Growth in a Developing Country, Emerald Publishing Limited, Leeds, pp. 105-127. https://doi.org/10.1108/978-1-83753-430-220241006