Resource information
Over the past few decades, the World
trading system has become increasingly more open. Tariff
rates have been reduced and quantitative restrictions
(quotas) have been progressively eliminated, e.g. the
Multi-Fiber Agreement (MFA). Most countries have adopted
more outward-looking economic policies, seeking to increase
growth and employment through expanding exports. Such
outward looking policies have even been adopted by countries
which previously pursued policies based on import
substitution as in South Asia. Protective trade restrictions
still persist, but tend to be in terms of more subtle
non-tariff barriers (such as sanitary or phyto-sanitary
standards), though anti-dumping measures and temporary
quantity restrictions are still used by many countries to
shield domestic producers. Trade regulations no longer
solely attempt to protect domestic producers; their scope
has extended to cover the need for enhanced security and the
desire for greater consumer protection through the
traceability of the production chain for many agricultural
products. Intense competition compels firms to reduce costs
throughout their manufacturing and distribution processes.
Outsourcing to lower cost firms and countries has been one
major source of cost reduction, reduced inventory costs
through just-in-time manufacturing, and distribution systems
has been another. Both are predicated on efficient, reliable
and low-cost supply chains. With the worldwide fall in
tariff levels, the efficiency of supply chains and the
associated logistics costs are becoming core determinants of
the competitiveness of both firms and countries. They may
also influence the destination of inward direct investment;
many countries can offer low labor costs and tax incentives,
fewer can offer quick, efficient, reliable, and low cost logistics.
