Did the least developed countries benefit from duty-free quota-free access to the Japanese market?

Countries classified as least developed countries (LDCs) were granted duty-free quota-free (DFQF) access to the Japanese market. This study examines the impact of that access and finds that, in general, it did not benefit the LDCs. The construction of concordance tables for Japan's 9 digit tariff line codes enables analysis at the tariff line level, which overcomes a possible aggregation bias. The exogenous nature of DFQF access mitigates the endogeneity problem. Various estimation models, including the triple difference estimator, show that in general the LDCs did not benefit from DFQF access to the Japanese market. The total value of imports from LDCs has been increasing, but the imports granted both zero tariffs and substantial preference margins over non-LDC countries were not successful. These findings suggest that for LDCs the tariff barrier is a relatively small obstacle: Trade is affected more strongly by other factors, such as infrastructure, nontariff barriers, geographic distance, and cultural differences.

The Role of Distance in Determining International Transport Costs: Evidence from Philippine Import Data

This paper presents an empirical investigation of the appropriateness of distance as a determinant of international transport costs by using Philippine import data. This study addresses three specific questions. First, does distance really matter in the determination of transport costs? Second, if distance is a significant factor, what is the magnitude of its impact? Third, does the impact of distance on transport costs vary by commodity? Results indicate that while distance is important in determining transport costs, using distance alone as the proxy of international transport costs is insufficient, and such use underestimates the impact of distance on international transport costs. Results also indicate that the impact of distance varies across commodity groups, but it is difficult to precisely determine the direction and the magnitude of this impact.