Trade Costs in the Developing World: 1996-2010

We use new data on trade and production in 167 countries to infer estimates of trade costs for manufactured goods and agriculture for 1996-2010. Trade costs are strongly declining in country income level. Among developing countries, only the upper middle income group has been successful in reducing trade costs faster than elsewhere in the world. Sub-Saharan African countries and low income countries remain subject to very high trade costs. Regional trade agreements, maritime transport connectivity, and trade facilitation performance are important determinants of trade costs.