Maritime transport costs significantlyimpede international trade. This article examines why thesecosts are so high in some countries and quantifies theimportance of two explanations: restrictive trade policiesand private anticompetitive practices. It finds that bothmatter, but the latter have a greater impact. Tradeliberalization and the breakup of private carrier agreementswould lead to an average of one-third lower liner transportprices and to cost savings of up to US dollar 3 billion ongoods carried to the United States alone. The policyimplications are clear: there is a need not only for furtherliberalization of government policy but also forstrengthened international disciplines on restrictivebusiness practices. The authors propose an approach todeveloping such disciplines in the current round of servicesnegotiations at the World Trade Organization (WTO).
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