On November 21, Prof. Dr. Stephan von Cramon-Taubadel gave a presentation of a working paper entitled “Trade Costs for Heterogeneous Agricultural Products” at ISET. The professor himself and Mr. Yi Qu are the co-others of the paper, which aims to evaluate trade costs for 125 different agricultural products based on 1992-2011 data from 156 different countries.

Geographic characteristics (island or mainland, number of neighboring countries, etc.), transportation (the distance products cover domestically or internationally), tariffs (on exports and imports), institutions and the history of the country, as well as demographic characteristics (the religion of the majority of the population in a particular trading partner, common language, etc.), serve a role of explanatory variables in the analyses.

According to the present results (which are the subject of further refinement), Prof. Dr. Stephan von Cramon-Taubadel stated that trading costs in developed countries are lower than in developing nations, but the costs seem to be on rising in the First World, while in low-income countries the trend is the opposite. The professor also stressed the fact that for low-income countries, the trend is much more volatile than for high-income countries, and that the trade costs increase by almost 3.24 times when the trade switches from domestic into international trade.

In the case of Georgia, Dr. Stephan von Cramon-Taubadel said that the country enjoys relatively low trade costs but the determinants of this advantage need further clarification.