The Trade Impact of Enhanced Multimodal Connectivity in the Asia-Pacific Region

Abstract

This paper develops new measures of multimodal transport connectivity, and uses a gravity model to show that improving performance could lead to major trade gains for the Asia-Pacific region. By improving multimodal connectivity by 5%, APEC would increase exports by around 4%, or between 2% and 6% per member economy. In dollar terms, this equates to an impact gain of $500bn in total, or between $850m and $115bn per member economy. Economies that are open, highly integrated into world markets, and with strong connectivity baselines stand to gain the most. We also find that of the elements of multimodal transport connectivity, it is logistics services performance that generally has the strongest effect on trade.