Transportation as Non-Tariff Barrier (Ntb)

There are several non-tariff barriers to trade. One of the non-tariff trade is transportation. Transportation can be obstacle to trade in several ways. Let us think logically, if I want to buy a common commodity, I will select the nearest shopping market to acquire it. Why? Because it would save my time and effort (energy) where I can utilize these resources in another activity. Yes, sometimes the nearby shopping market has more expensive than other far ones but still due to my priority to save time and energy, I would not go to far market.

As a real example, when search internet for a mirror for Toyota sequoia car and ask local market about its price, I realize that the price of my car mirror is very low (1) compare to local market. Although the price was low in ebay, I have decided to buy locally due to time issue.

Let us take another example and discover how this barrier affecting our life. When I go to fish market with a wish to buy certain type of fish, which is brought from different country, I notice that the fish is not fresh and so I changed my mind to buy only fresh local fish. In this example, we notice how the time spent during transportation can affect the commodity.

Transportation play big role in international trading. With technology this barrier reduced a lot. Planes, cargo ships and tankers, trains, tracks, camions, …etc are examples of used equipment in goods transportation. These transportation equipment need routs and rules. Buying transportation equipment, building routs, and applying rules incur a lot of cost. This cost may vary based on country resources. Example, Saudi Arabia have high amount of petroleum and so the cost of constructing roads will be at very low cost compared to others. USA is capital abundant country and so the cost of transportation equipment is very low compared to most of other countries.

As per United Nations Economic Commission for Africa (ECA), transportation cost in Africa is one of the highest in the world. As...