Trade Impacts of Increased Border Security Concerns

The Discouraging Effect of Risks in WTO Negotiations: Determinants and Perceived Changes

“…The problem is that governments are often unaware of current non-tariff barriers abroad and their trade-restrictive effects. They tend to know the most important obstacles in their major export markets, but they are far from 8 See, for instance, Walkenhorst and Dihel (2006) on the effects of new border security measures.…”

Freight transportation costs and the thickening of the US–Mexico border

“…Anderson and van Wincoop (2004) find that, for industrialized countries, border-related trade barriers are equivalent to a 44 percent ad valorem tax on traded goods. In a multi-country analysis, Walkenhorst and Dihel (2006) report that, if border security measures raise frictional costs by one percent of the value of traded goods, the result is a 0.9 percent decrease in imports and a decline in welfare of $75 billion per year worldwide. While borders may represent substantial barriers to trade, Evans (2003) finds that the effect of borders on trade is not entirely the result of trade policies.…”

“…Commercial insurance premiums may have increased due to higher perceived risks of terrorist attacks, especially in developing countries with less extensive police apparatuses (DFAT, 2004). Given the importance of fuel costs for freight transportation, however, the sharp decline in oil prices in the immediate aftermath of the 9/11 attacks may have partially shielded the international freight distribution industry from the full effects of increased border security (Walkenhorst and Dihel, 2006).…”

The Time Cost of Documents to Trade

“…Examples include costs associated with internet availability (Freund and Weinhold, 2004), quality of roads connecting factories to ports (Blyde and Iberti, 2014), security concerns not just at the border but also in terms of higher insurance costs, etc. (Walkenhorst and Dihel, 2006), and standards harmonization and automating customs procedures (Herter et al 2001). Hence, our results discussed below should be treated with due caution and not generalized to other aspects of trade facilitation without further analysis.…”