Trade Facilitation - Factor for Business Dynamism

High trade costs are an obstacle in trading and have impact in the realization of the benefits from trade liberalization. Trade profits depend not only on tariff liberalization but also on the quality of infrastructure and related services. Improved infrastructure and logistics services play an important role in international trade flows. On the one hand, they generate enormous wealth by reducing the cost of trade due to their non-discriminatory and non-competitive characteristics. On the other hand, they integrate production and trade across the country. These aspects are important to consider in order explaining the importance of trade facilitation, as it enables the smooth advancement and business dynamization. Thus, very often trade costs are cited as an important determinant of trade volume. There is also a growing literature on concerns about the impact of trade costs on trade volume. Most studies of this nature show that integration is a result of reduced transport costs for individual and all infrastructure services in general. The common goal of economic interaction is to reduce trade barriers - visible and invisible. Direct evidence of border costs shows that tariff barriers are now low in most countries - on average less than 5% of the average measured in rich countries, with a few exceptions, and in developing countries at an average between 10 and 20%. As world follows a dramatic drop in tariffs over the past two decades, many barriers remain to "punish" trade, between existing weaker and heavier barriers. An example of softer barriers is trade tackling and business facilitation measures. The heavier set of barriers commonly referred to physical or infrastructural barriers, deal with transport facilitation measures. The costs created by these barriers can be grouped together and referred to as trade costs which are estimated as difference between the cost of exports and imports. This difference roughly shows the cost of transporting goods from one country to another