This is the Cato Daily Podcast for Friday, May 2nd, 2008. I'm Caleb Brown.

Tariffs are trade barriers by Fiat. Trade facilitation, however, is a more tangible animal.

How long does it take for goods to get through customs?

How well do ports function?

An Iconson, Associate Director of the Center for Trade Policy Studies

at the Cato Institute,

and author of a forthcoming paper on trade facilitation,

argues that as artificial trade barriers fall,

very real barriers to trade will take on increasing prominence.

Draw out the distinction between people are very familiar with tariffs and the impact that tariffs have on trade.

Not so much do people understand trade

facilitation? Tariffs are sort of the the the legalistic

obstacles to trade. They are the barriers that you can expunge just by with

signatures. Trade policy makers can sit at a table and say, you know, let's reduce tariffs 20% or let's eliminate tariffs.

That's only part of the problem. There's actually the physical movement of goods across borders,

and the physical movement entails

shipping and clearance of customs, rail and freight services,

corruption.

So there are a lot of areas that need to be smoothed out.

The analogy I like to use is like a hose.

Cutting tariffs entirely is like turning the hose on full blast.

But if the hose is all tangled up, you're not going to get maximum water flow.

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