Recent studies on trade policy for low-income countries such as Tanzania have established that high transport costs associated with poor (and often inadequate) infrastructure characteristic in such countries add to transaction costs, which is a barrier to trade and an additional source of protection to domestic producers of import competing goods. This paper reports the results on Tanzania of a study to assess the protective impact of transport costs on trade. The estimates are used to identify sectors most vulnerable to transport costs, and determine the extent in which Transport costs contribute to protection.
The report comprises an introduction, and then sections on: review of trade policy and performance for Tanzania, the transport sector in Tanzania, framework and data for analysing level of protection, estimates of protection due to tariff and transport cost, and conclusion and policy implications.
Transport Cost and Trade Policy in Tanzania, Economic and Social Research Foundation (ESRF), Dar es Salaam, Tanzania, v + 46 pp.