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The authors show in this paper that increasing the transparency of the trading environment can be an important complement to traditional liberalization of tariff and non-tariff barriers. Our definition of transparency is grounded in a transaction cost analysis. The authors focus on two dimensions of transparency: predictability (reducing the cost of uncertainty) and simplification (reducing information costs). Using the Asia Pacific Economic Cooperation (APEC) member economies as a case study, the authors construct indices of importer and exporter transparency for the region from a wide range of sources. Our results from a gravity model suggest that improving trade-related transparency in APEC could hold significant benefits by raising intra-APEC trade by proximately USD 148 billion or 7.5 pecent of baseline trade in the region.

Cost Analysis --- Economic Development --- Economic Theory and Research --- Empirical Evidence --- Empirical Research --- Environment --- Environmental Economics and Policies --- Intermediate Goods --- Macroeconomics and Economic Growth --- Policy Instruments --- Producers --- Property Rights --- Transaction Costs --- Welfare Gains

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Despite the growing importance of commitments to foreign investors in services in regional trade agreements, there are no applied general equilibrium models in the literature that assess these regional impacts. This paper develops a 52 sector applied general equilibrium model of Tanzania with foreign direct investment, and uses that model to assess Tanzania's regional and multilateral trade options. The model incorporates the features of the modern theory of international trade that has shown empirically that trade and foreign direct investment can increase productivity, and trade and foreign direct investment with technologically advanced countries is especially valuable for that purpose. To assess the sensitivity of the results to parameter values, the model is executed 30,000 times, and the results are reported as confidence intervals of the sample distributions. The analysis finds that a 50 percent preferential reduction in the ad valorem equivalents of barriers in all business services by Tanzania with respect to its African regional partners would be slightly beneficial for Tanzania. But wider liberalization, with larger partners or multilaterally, it will yield much larger gains due to providing access to a much wider set of service providers. Finally, the results show that the largest gains in services would be derived from reduction of regulatory barriers that are geographically non-discriminatory.

Advanced Countries --- Banks & Banking Reform --- Barrier --- Economic Theory & Research --- Emerging Markets --- Environment --- Environmental Economics & Policies --- Equilibrium Models --- Finance and Financial Sector Development --- Foreign Investors --- International Trade --- Macroeconomics and Economic Growth --- Multilateral Trade --- Private Sector Development --- Productivity --- Regional Trade --- Regulatory Regime --- Transport --- Transport Economics Policy & Planning --- Welfare Gains

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November 1999 - If the United States grants Vietnam most favored nation status, both countries would benefit. Vietnamese exports to the United States would more than double, and Vietnam would gain substantial welfare benefits from improved market access and increased availability of imports. For the United States, lowering the current high tariffs against Vietnam would improve welfare by reducing costly diversion away from Vietnamese products. Since the U.S. embargo on trade with Vietnam was lifted in 1994, exports from Vietnam to the United States have risen dramatically. However, Vietnam remains one of the few countries to which the United States has not yet granted most favored nation (MFN) status. The general tariff rates that the United States imposes average 35 percent compared with 4.9 percent for the MFN rate. Granting MFN status to Vietnam would improve its terms of trade and help improve the efficiency of resource allocation in the country. Better access to the U.S. market would increase the volume of Vietnamese exports to the United States and the prices received for them while also reducing their costs to U.S. users. Fukase and Martin use a computable general equilibrium model to examine the effects of reducing U.S. tariffs on Vietnamese imports from general rates to MFN rates. They estimate tariff changes using the U.S. tariff schedule for 1997 weighted by Vietnam's exports to the United States. The results suggest that after a change to MFN status for Vietnam, its exports to the United States would more than double, from the 1996 baseline of USD 338 million to USD 768 million. By conservative estimates, welfare gains in Vietnam would be about USD 118 million a year, or a 0.9 percent increase in real income per capita. Sixty percent of that gain would come from improved terms of trade and the other 40 percent from gains in efficiency. Because Vietnam's exports to the United States have been growing rapidly since the lifting of the embargo in 1994, the trade expansion resulting from MFN status may be larger by the time Vietnam obtains it. Based on 1998 values, the increase in exports would have been around USD 750 million a year. For the United States, lowering the high tariffs on imports from Vietnam would improve consumer welfare by lowering prices and increasing the volume of those imports. The direct welfare gains in the United States are estimated to be USD 56 million a year. There are likely to be significant additional gains to both countries from the liberalization Vietnam will undertake as a result of the negotiations for MFN status and for entry into the World Trade Organization. This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to understand the links between trade and development in transition economies. The authors may be contacted at efukase@worldbank.org or wmartin1@worldbank.org.

Agribusiness and Markets --- Agricultural Commodities --- Apparel --- Currencies and Exchange Rates --- Economic Theory and Research --- Export Competitiveness --- Exporters --- Exports --- Finance and Financial Sector Development --- Food and Beverage Industry --- Free Trade --- General Equilibrium Model --- High Tariffs --- Industry --- International Economics & Trade --- Macroeconomics and Economic Growth --- Market Access --- Metal Products --- Public Sector Development --- Rural Development --- Tariff --- Tariff Data --- Tariff Rates --- Tariff Schedule --- Tariffs --- Terms Of Trade --- Trade --- Trade Liberalization --- Trade Patterns --- Trade Policy --- Welfare Gains --- World Trade --- World Trade Organization

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May 1999 - In the new round of World Trade Organization talks expected in late 1999, negotiations about access to agricultural and services markets should be given top priority, but new trade agenda issues should also be discussed. Including new trade agenda issues would increase market discipline's role in the allocation of resources in agriculture and would encourage nonagricultural groups with interests in the new issues to take part in the round, counterbalancing forces favoring agricultural protection. A new round of World Trade Organization negotiations on agriculture, services, and perhaps other issues is expected in late 1999. To what extent should those negotiations include new trade agenda items aimed at ensuring that domestic regulatory policies do not discriminate against foreign suppliers? Hoekman and Anderson argue that negotiations about market access should be given priority, as the potential welfare gains from liberalizing access to agricultural (and services) markets are still huge, but new issues should be included too. Including new trade agenda issues would increase the role of market discipline in the allocation of resources in agriculture and would encourage nonagricultural groups with interests in the new issues to take part in the round, counterbalancing forces in favor of agricultural protection. They also argue, however, that rule-making efforts to accommodate the new issues should be de-linked from negotiations about access to agricultural markets, because the issues affect activity in all sectors. This paper-a product of the Development Research Group-is part of a larger effort in the group to analyze options and priorities for developing countries in the run-up to a new round of WTO negotiations. Bernard Hoekman may be contacted at bhoekman@worldbank.org or kanderson@economics.adelaide.edu.au.

Agribusiness --- Agricultural Production --- Agricultural Protection --- Agriculture --- Competition --- Debt Markets --- Economic Development --- Economic Theory and Research --- Economics --- Emerging Markets --- Environment --- Environmental --- Environmental Economics and Policies --- Environmental Regulations --- Finance and Financial Sector Development --- Free Trade --- Income --- International Economics & Trade --- Investment --- Labor Policies --- Law and Development --- Macroeconomics and Economic Growth --- Markets --- Policies --- Private Sector Development --- Public Sector Development --- Quotas --- Resources --- Rural Communities --- Social Protections and Labor --- Standards --- Subsidies --- Tariffs --- Taxation --- Trade --- Trade Law --- Trade Policy --- Welfare Gains --- World Trade Organization

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Projects and reforms targeting infrastructure services can affect consumer welfare through changes in the price, coverage, or quality of the services provided. The benefits of improved service quality-while significant-are often overlooked because they are difficult to quantify. This paper reviews methods of evaluating the welfare implications of changes in the quality of infrastructure services within the broader theoretical perspective of welfare measurement. The study outlines the theoretical assumptions and data requirements involved, illustrating each method with examples that highlight common methodological features and differences. The paper also presents the theoretical underpinnings and potential applications of a new approach to analyzing the effects of interruptions in the supply of infrastructure services on household welfare.

Air Pollution --- Communities & Human Settlements --- Compensating Variation --- Consumption --- Consumption Patterns --- Demand --- Drinking Water --- Economic Theory and Research --- Economics --- Energy --- Energy Production and Transportation --- Environment --- Environmental Economics and Policies --- Equivalent Variation --- Finance and Financial Sector Development --- Financial Literacy --- Housing and Human Habitats --- Income --- Industry --- Information --- Infrastructure Economics and Finance --- Infrastructure Regulation --- Investment --- Investments --- Macroeconomics and Economic Growth --- Markets and Market Access --- Need --- Poverty --- Supply --- Town Water Supply and Sanitation --- Water --- Water and Industry --- Water Resources --- Water Supply and Sanitation --- Water Supply and Sanitation Governance and Institutions --- Welfare Economics --- Welfare Gains --- Willingness To Accept --- Willingness To Pay