Common Carriers Industry; Environmental Economics & Policies; Economic Theory & Research; Payment Systems & Infrastructure; Free Trade; Transport and Trade Logistics
Middle East and North Africa
Summary: Without a competitive transport industry, the Maghreb countries will not truly benefit from reform aimed at increasing the region's share of international trade. A study of barriers to the region's trade, especially with countries of the European Union, identified more than 30 barriers, in four categories: barriers to imports, to exports, of infrastructure and equipment, and of intra-Maghreb trade. These include: 1) direct barriers including: (a) from traditional distortions (price, discriminatory access to markets); (b) nontariff barriers (administrative, regulatory and tax-related restrictions); (c) traffic agreements (protecting national flags); and (d) lack of infrastructure and equipment; and 2) indirect barriers deriving from: (a) trade harmonization (simplified customs procedures and tariffs structures, elimination of quotas, reduction of customs tariffs on transport equipment); and (b) technology lags (telecommunications and handling). The authors quantify barriers in terms of "tariff equivalents," expressed as a nominal rate of protection based on the free on board value of the merchandise. But the nominal rate of protection measures only the direct costs of distortions. The effective rate of protection measures both direct and indirect effects, and effective rates are generally twice as high as nominal rates. To reconcile macroeconomic and microeconomic approaches to measuring effective rates, the authors use a partial equilibrium model (SMART model) to estimate the impact on the balance of payments of eliminating excess costs. Most of the corrective policies they recommend concern multimodal transport in the trade between Europe and the Arab Maghreb Union. The challenges are considerable: not only does such a system pave the way for cost and time savings ("just-in-time" transport), but it also adopts the logistics management that the most advanced European enterprises use to orchestrate their raw material purchasing, production and marketing functions. A multimodal transport system allow them to reduce inventories significantly and to respond better to volatile demand. Essential for just-in-time multimodal transport and logistics management include efficient modern transport techniques, efficient communications systems, efficient modern merchandise handling, and appropriate regulations. These conditions are still not fully in place in the Maghreb countries, except partially in some parts of the clothing and textile industry.
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