Comparing Cost and Sources of Iran's Bilateral Trade Growth with Main Partners(Case of: Agricultural, Nonagricultural and Total Commodities)

This study concerns with calculation of Iran''s bilateral trade costs and major influential factors on trade volume for three commodity groups including: agricultural، non-agricultural and total. Main finding reveal that over the period 1995-2010 weighted average of trade cost for three commodity groups has declined by 14، 13 and 13. 5 percent، respectively This reduction، however، was greater for UAE، Brazil، Switzerland and China for agricultural commodity and China، UAE and India for other two groups. Also، trade growth Decomposition indicates that income growth and trade cost reduction are main effective factors on trade volume variation with 3، 67، 51 and 97، 33، 49 percent of trade volume variation for three commodity groups، respectively. Hence it''s recommended to pay special attention to trade costs in arrangement of trade relations.