Geloso Grosso, Massimo and Shepherd, Ben (2009): Liberalizing air cargo services in APEC.
Download (305kB) | Preview
This study aims at assessing the link between a more liberal air cargo regime and increased bilateral merchandise trade in the Asia Pacific region, under the auspices of APEC. Using the gravity model and employing the Air Liberalisation Index (ALI) developed by the WTO Secretariat, this paper finds strong support for two hypotheses. First, more liberal air services policies are positively, significantly and robustly associated with higher bilateral trade in merchandise. The results also show that air transport policy matters more for some sectors than for others. A particularly strong relationship is found between bilateral liberalisation and trade in manufactured goods, time sensitive products, and parts and components. Considering the sector found to be most sensitive to the degree of aviation liberalisation, the estimates imply that a one point increase in the ALI is associated with an increase of 4% in bilateral parts and components trade, prior to taking account of general equilibrium effects. These findings have important policy implications. In particular, economies actively seeking greater integration in international production networks could greatly benefit from a more liberal aviation policy regime.
|Item Type:||MPRA Paper|
|Original Title:||Liberalizing air cargo services in APEC|
|Keywords:||Aviation; international trade in services; liberalization; international trade in goods; parts and components trade; production networks; APEC.|
|Subjects:||L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L93 - Air Transportation
F - International Economics > F1 - Trade > F15 - Economic Integration
F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations
|Depositing User:||Ben Shepherd|
|Date Deposited:||10. Oct 2009 05:59|
|Last Modified:||08. Jan 2014 08:21|
Achard, P. (2009), “The Regulation of International Air Cargo Services”, Master Thesis, Groupe d’Economie Mondiale, Sciences Po.
Anderson, J.E. and E. Van Wincoop (2003), “Gravity with Gravitas: A Solution to the Border Puzzle”, The American Economic Review, Vol 93 No. 1, 170-192.
Ando, M., and F. Kimura (2003), “The Formation of International Production and Distribution Networks in East Asia”, Working Paper No. 10167, National Bureau of Economic Research.
Boeing (2007), “World Air Cargo Forecast 2006-2007”, Seattle, USA.
Bowen J. T. Jr. and T. R. Leinbach (2002), “Air Cargo Services in Asian Industrialising Economies: Electronics Manufacturers and the Strategic Use of Advanced Producer Services”, Papers Regional Science, 82, 309–332 (2003).
Centre for Asia Pacific Aviation (CAPA) (2007), “Liberalisation of Air Services in the APEC Region, 1995-2005”, APEC Transportation Working Group and the Australian Department of Transport and Regional Services.
Djankov, S., C. Freund, and C. Pham (forthcoming), “Trading on Time”, Review of Economics and Statistics.
Dodwell, D., Zhang, A. (2000), “Air Cargo at Hong Kong's Service: an Analysis of Current and Future Roles, and Policy Priorities”, Manuscript, Department of Economics and Finance, City University of Hong Kong.
Geloso Grosso, M. (2008), “Liberalising Air Passenger Services in APEC”, Working Paper, Groupe d’Économie Mondiale, University of Sciences Politiques, November 2008.
Gonenc, R., and Nicoletti, G. (2000), “Regulation, Market Structure and Performance in Air Passenger Transport”, OECD, Paris.
Grünschloß C. (2005), “The Development of International Airports into Air Cargo Hubs and its Economic Impact on Local Industrial Structures”, Faculty of Business Administration and Management, Heinrich-Heine University Düsseldorf.
Helpman, E., M. Melitz, and Y. Rubinstein (2008), “Estimating Trade Flows: Trading Partners and Trading Volumes”, Quarterly Journal of Economics, 123(2), 441-487.
Hummels, D. (2001), “Time as a Trade Barrier”, Mimeo, Purdue University.
IATA (2006), “Air Freight 2006: Brighter Skies Ahead”, Economic Briefings, February 2006.
IATA (2009), “Cargo Plummets 22.6% in December”, Press Release, 29 January 2009, available at: http://www.iata.org/pressroom/pr/2009-01-29-01.htm.
Kasarda, J. D., J. Green and D. Sullivan (2004), “Air Cargo: Engine of Economic Development”, study commissioned by the International Air Cargo Association (TIACA).
Kasarda, J. D., S. J. Appold and M. Makoto (2006), “The Impact of the Air Cargo Industry on the Global Economy”, study commissioned TIACA and presented at the TIACA Air Cargo Forum, Calgary, Canada, September 13, 2006.
Limao, L. and Venables, A.J. (2001), “Infrastructure, Geographical Disadvantage, Transport Costs and Trade”, World Bank Economic Review, 15, 451-479.
Martin, W., and C. Pham (2009), “Estimating the Gravity Model when Zero Trade Flows are Frequent”, Working Paper, available at: http://www.deakin.edu.au/buslaw/aef/workingpapers/papers/2008_03eco.pdf.
Martinez-Zarzoso, I., F. Nowak-Lehmann, and S. Vollmer (2006), “The Log of Gravity Revisited”, CeGE Discussion Paper 64, University of Goettingen, available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=999908.
Micco, A. and T. Serebrisky (2004), “Infrastructure, Competition Regimes, and Air Transport Costs: Cross-Country Evidence”, World Bank Policy Research Working Paper no. 3355, available at SSRN: http://ssrn.com/abstract=610399.
Nordås, H.K., E. Pinali, and M. Geloso Grosso (2006), “Time and Logistics as a Trade Barrier”, OECD Trade Policy Working Paper No 35.
OECD (1999), “Regulatory Reform in International Air Cargo”, document DSTI/DOT(99)1, Paris.
OECD (2002), “Liberalisation of Air Cargo Transport”, document DSTI/DOT(2002)1/REV1, Paris.
Oxford Economic Forecasting (2005), “The Impact of the Express Delivery Industry on the Global Economy”, Oxford.
Piermartini, R., and L. Rousova (2008), “Liberalisation of Air Transport Services and Passenger Traffic”, Staff Working Paper ERSD-2008-06, World Trade Organisation.
Ruo, G. H. (2002), “Shanghai Customs Clearance Procedures and Logistics Information Services,” Presentation to the Forum on “WTO Implications on Air Cargo Logistics in China”, December 2002, Hong Kong.
Santos, S. and S. Tenreyro (2006), “The Log of Gravity”, Review of Economics and Statistics, November 2006, 88(4): 641-658.
Senguttuvan, P. S. (2006), “Air Cargo: Engine for Economic Growth and Development — A Case Study of Asian Region”, paper presented at the National Urban Freight Conference, 1-3 February 2006, METRANS Transportation Centre, School of Policy, Planning and Development University of Southern California, Los Angeles, USA.
Schwarz G. (2005), “Enabling Global Trade Above the Clouds: Restructuring Processes and Information Technology in the Transatlantic Air Cargo Industry”, Graduate School of Geography, Clark University, Worcester, USA.
US International Trade Commission (ITC) (2005), “Logistics Services: an Overview of the Global Market and Potential Effects of Removing Trade Impediments”, Investigation No 332-463, USITC Publication 3770.
Wilson J. S., C. L. Mann and T. Otsuki (2005), “Assessing the Benefits of Trade Facilitation: A Global Perspective”, The World Economy, Blackwell Publishing, vol. 28(6), pages 841-871, 06.
WTO (2000a), “Communication from the European Communities and their Member States: the Review of the GATS Annex on Air Transport Services” document S/C/W/168.
WTO (2000b), “Communication from Australia: the Mandated Review of the GATS Annex on Air Transport Services” document S/C/W/167.
WTO (2001), “Developments in the Air Transport Sector since the Conclusion of the Uruguay Round, Part Seven: Background Note by the Secretariat”, document S/C/W/163/Add.6.
WTO (2004), “Logistics Services”, Communication from Australia, Hong Kong China, Liechtenstein, Mauritius, New Zealand, Nicaragua, Switzerland, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, document TN/S/W/20.
WTO (2006), “Second Review of the Air Transport Annex: Developments in the Air Transport Sector (Part II). Quantitative Air Service Agreements Review (QUASAR) (Volumes I and II): Note by the Secretariat”, document S/C/W/270.
WTO (2007), “Second Review of the Air Transport Annex: Developments in the Air Transport Sector (Part III): Note by the Secretariat”, Part E: Air Cargo Services, document S/C/W/270/Add.2.
Zhang, A. and Y. Zhang (2002), “A Model of Air Cargo Liberalisation: Passengers vs. All-Cargo Carriers”, Transport Research Part E 38 (2002) 175-191.