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Ms. Emine Boz, Ms. Nan Li, and Hongrui Zhang

(2002; henceforth EK) to data on bilateral trade flows in agriculture, manufacturing, and services. Deriving separate estimates for different years and sectors, we allow the trade costs and their relationship with trade flows to vary over time and across sectors. Such variation is critical for our analysis, which examines a 45-year period characterized by significant improvements in shipping and information technologies for sectors that exhibit heterogeneous tradability. Our measures of trade cost include nontariff barriers that are difficult to quantify but