Thinking Aloud: Volume VI, Issue 12

The October, 2015 issue comes with the theme of Non-Tariff Measures (NTMs) and trade cost. The first article on “Demystifying non-tariff barriers (NTBs) in South Asia?” emphasizes on the significance of dealing with NTMs for promoting intra-regional trade in South Asia. The article clarifies the difference between NTMs, which are in most cases legitimate, and NTBs, which are discriminatory and illegitimate. The article underscores the need for developing the capacities of domestic firms to meet the justified SPS and TBT standards in other countries and strengthening the capacities of the National Standards Authorities so that certificates issues by them are accepted in other countries. Furthermore, the article calls for harmonization of standards, custom procedures, establishing mutual recognition principle, improvements in relevant infrastructures and reducing procedural obstacles in South Asian countries through regionally coordinated efforts. The second article on “Decomposing bilateral trade costs between LDCs and non-LDCs” uses a balanced panel data for 130 countries, and explores the factors affecting trade costs while Least Developed Countries (LDCs) trade with their non-LDC partners, and the relative importance of those factors. The regression results suggest greater importance of improving the quality of logistic performance of the LDCs for the reduction in trade costs between LDCs and non-LDCs, and highlights the greater significance of liberalization of the tariff regimes in the LDCs for attaining lower trade costs with their trading partners. The interview session features an interview of Dr. Syed Humayun Kabir, Director General of the South Asian Regional Standards Organization (SARSO), where he elaborates the importance, functions, and current and future activities of the SARSO. Dr. Kabir attaches immense importance to developing harmonized standards for the region to facilitate intra-regional trade.