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Using Supply Chain Analysis to Examine the Costs of Non-Tariff Measures (NTMs)

and the Benefits of Trade Facilitation

The growing global trend in the use of the vertical specialization, seeking the manufacture of the goods in the most efficient countries in the world, to led to a greater reliance on the stages of production to international trade. It has become necessary to identify where the greatest rents and inefficiencies are, with the analysis of NTMs by the supply-chain decomposition can it be possible because separating and analyzing step by step the supply chain it can be focus in the costs of moving and the costs associated with the time of waiting and realized where are the necessary costs and the costs that the NTMs are creating after be applied by a country. The analysis of NTMs examines factors that make trade more difficult comparing the trade’s costs in different countries also NTMs increase the cost of goods but greater for goods produced in a fragmented manner that for a goods with simple production processes. As a result of the analysis of NTMs governments can see that apply this restrictions makes difficult the international trade adding the costs of waiting for a long procedures of moving and it’s useful to give priority to the efforts of policy.

Trade agreements between developed and developing countries

Trade agreements between developed and developing countries is becoming a usual topic in the international trade panorama and the free trade between south and north are going up. This is a positive change and attitude by the governments because both of the countries will be benefited and at the end the world’s economy. Even though are many aspects to agree as products, markets, and sector to liberalize and the local economic impact this agreements will be positive for the countries involved in reason that will increase the markets, the international investment, etc. The willing of these countries is get into a total economic union that is the final target but before they have to go through for a whole process as free trade agreements, custom union, and monetary union. The number of the countries doing free trade agreements and other kind of agreements is increasing around the world and finally in a long term will benefit the producer and consumers of goods and the world’s economy while this agreements still legal and fear up to the WTO rules.