Trade facilitation, income distribution and poverty reduction

Definition

The effect of the implementation of trade facilitation measures on the distribution of income and poverty.

Overview

There are three main ways that trade facilitation initiatives can affect the ditribution of income, and hence aid poverty reduction in a society:

  1. Trade facilitation increases the volume and range of a country's international trade, by reducing the transaction costs of trade, making exports more competitive, leading to increases in wages and the numbers employed in the exporting sectors, and imports less expensive, thereby also increasing real wages. One example of the direct effect of how an improvement in the supply chain can engender such an impact is illustrated by the export of mangoes from West Africa to Europe (See World Bank 2003).
  2. Trade facilitation can then contribute to economic growth, which in turn will lead to higher incomes, greater employment and a positive effect on poverty. The process also generates a number of byproducts; firstly, as the economy becomes stronger, with a broader trading base, it becomes less vulnerable to exogenous shocks. Secondly, an improved milieu for trade changes the incentives to invest, leading to greater foreign direct investment and increases in investment in human capital.
  3. The final way that trade facilitation can impact on income distribution and poverty relates to the increase in government revenues, that is the concomitant of inceased trade, improved efficiency and reduced corruption, allowing greater expenditures on social programs.

A further advantage of trade facilitation, in comparison with trade liberalisation initiatives, is that the former, because of their more modest results, and the relative proportion of transport costs in total costs, means that the initiatives do not generate the negative impacts associated with the latter.

Where to Start

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The GFP welcomes feedback/additions/tools from practitioners, who either applied the GFP methodology or are using their own instruments. The GFP is particularly interested in collecting and assembling all the methodologies, survey instruments and results developed and used by its Partners.

Please e-mail those to support@gfptt.org and suggest the topic(s) under which they could be included. Or post relevant documents under your partner profile and assign them to this topic.

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Irish Minister of State assesses Port Training Programme in United Republic of Tanzania

29 Apr - Joe Costello, Minister of State at Ireland’s Department of Foreign Affairs and Trade,  has completed a visit to the United Republic of Tanzania at which he reviewed the impact of the UNCTAD Port Training Programme.​ Read more ...

 

Geographic coverage: 
Global

UNCTAD Liner Shipping Connectivity Index (LSCI)

Countries’ access to world markets depends largely on their transport connectivity, especially as regards regular shipping services for the import and export of manufactured goods. UNCTAD’s Liner Shipping Connectivity Index (LSCI) aims at capturing a country’s level of integration into global liner shipping networks.

How to join: 

Free viewing and download from http://stats.unctad.org/lsci

Periodicity: 
annual
Geographic coverage: 
Global

UNCTAD Review of Maritime Transport

The Review of Maritime Transport is an UNCTAD flagship publication, published annually since 1968.

Around 80 per cent of the volume of international trade in goods is carried by sea, and the percentage is even higher for most developing countries. The Review of Maritime Transport provides an analysis of structural and cyclical changes affecting seaborne trade, ports and shipping, as well as an extensive collection of statistical information. Every issue provides data and insights on:

How to join: 

Free download from http://unctad.org/rmt

Periodicity: 
annual
Geographic coverage: 
Global

Review of Maritime Transport 2012

More than 80 per cent of international trade in goods is carried by sea, and an even higher percentage of developing-country trade is carried in ships.

The Review of Maritime Transport, an annual publication prepared by the Division on Technology and Logistics of the UNCTAD secretariat, is an important source of information on this vital sector. It closely monitors developments affecting world seaborne trade, freight rates, ports, surface transport and logistics services, as well as trends in ship ownership and control and fleet age, tonnage supply and productivity.

Geographic coverage: 
Global

Trade and Transport Facilitation Assessment - A Practical Toolkit For Country Implementation

Release date: 
07/08/2010
Published date: 
07/08/2010

This new edition of the toolkit provides an opportunity not only to reflect the changes in the trade environment and the need for additional features in the toolkit, but also to benefit from the experiences of the assessments already undertaken based on the original edition. In 2001, the Bank issued a first Trade and Transport Facilitation Audit (TTFA) toolkit based on an original concept developed by John Raven. This initial concept was extensively revised to give the new toolkit an increased operational focus.

Type: 
Reports/Studies
Relevance Degree: 
Must Read
Geographic coverage: 
Global

Distance and regionalization of trade for low-income countries

Release date: 
06/20/2010
Published date: 
02/18/2010

The "distance effect" measuring the elasticity of trade flows to distance has been rising since the early 1970s in a host of studies based on the gravity model, leading observers to call it the "distance puzzle". This paper reviews the evidence and explanations. Using an extensive data set of 124 countries over the period 1970-2005, the authors confirm the existence of this puzzle and identify that it only applies to poor countries (the bottom third in per capita income terms in the sample -- i.e., the low-income countries according to the World Bank classification, 2006).

Type: 
Working Papers
Relevance Degree: 
Good Read
Geographic coverage: 
Global

Conclude Doha : it matters !

Release date: 
06/19/2010
Published date: 
11/18/2009

The Doha Round must be concluded not because it will produce dramatic liberalization but because it will create greater security of market access. Its conclusion would strengthen, symbolically and substantively, the WTO's valuable role in restraining protectionism in the current downturn. What is on the table would constrain the scope for tariff protection in all goods, ban agricultural export subsidies in the industrial countries and sharply reduce the scope for distorting domestic support - by 70 per cent in the EU and 60 per cent in the US.

Type: 
Working Papers
Relevance Degree: 
Good Read
Geographic coverage: 
Global

Export Performance and Trade Facilitation Reform: Hard and Soft Infrastructure

Release date: 
04/19/2010
Published date: 
06/19/2010

The authors estimate the impact of aggregate indicators of “soft” and “hard” infrastructure on the export performance of developing countries. They build four new indicators for 101 countries over the period 2004-07. Estimates show that trade facilitation reforms do improve the export performance of developing countries. This is particularly true with investment in physical infrastructure and regulatory reform to improve the business environment.

Type: 
Working Papers
Relevance Degree: 
Good Read
Geographic coverage: 
Global

Estimating trade restrictiveness indices

Release date: 
05/01/2008
Published date: 
01/31/2006

The objective of this paper is to provide indicators of trade restrictiveness that include both measures of tariff and nontariff barriers for 91 developing and industrial countries. For each country, the authors estimate three trade restrictiveness indices. The first one summarizes the degree of trade distortions that each country imposes on itself through its own trade policies. The second one focuses on the trade distortions imposed by each country on its import bundle.

Type: 
Reports/Studies
Relevance Degree: 
Good Read
Geographic coverage: 
Global

Product standards, harmonization, and trade : evidence from the extensive margin

Release date: 
05/01/2008
Published date: 
11/12/2007

The author uses a new database of EU product standards in the textiles, clothing, and footwear sectors to present the first empirical evidence that international standards harmonization is associated with increased partner country export variety. A 10 percentage point increase in the proportion of internationally harmonized standards is associated with a 0.2 percent increase in partner country export variety, whereas a 10 percent increase in the total number of standards is associated with a nearly 6 percent decrease in product variety.

Type: 
Reference Documents
Relevance Degree: 
Useful Background
Geographic coverage: 
Global

Aid and Trade

Release date: 
03/31/2008
Published date: 
07/31/2007

The Doha Round that started in 2001 was based on the recognition that trade liberalization was not enough for the development prospects of many low-income countries. Some developing countries could not benefit from a multilateral liberalization based on reciprocal market access, because they had little to offer. Among these developing countries, some could even not benefit from a preferential scheme because they lacked the infrastructure necessary in order to deliver reliable and safe products to Northern consumers.

Relevance Degree: 
Useful Background
Geographic coverage: 
Global

Cost and Benefits of Implementing Trade Facilitation Measures under Negotiations at the WTO: an Exploratory Survey

Release date: 
02/15/2008
Published date: 
01/15/2006

This study suggests that the WTO may need to establish a long-term institutional mechanism to deal with evolving trade facilitation measures and issues. Countries may also agree on a subset of well-defined TFMs to be implemented by all, as well as on a complementary list of possibly more controversial TFMs from which countries would select, based on their own needs and specificity, a pre-determined number of measures for implementation.

 

Type: 
Reference Documents
Relevance Degree: 
Useful Background
Geographic coverage: 
Global

OECD Regional Forum on Trade Facilitation: Presentations

Release date: 
12/20/2006
Published date: 
12/20/2006

This page contains the presentations (in French and English) held at the OECD Regional Forum: Maximising the Developmental Benefits of Trade Facilitation, held on 27-28 September 2006.

Type: 
Reference Reading Tools
Relevance Degree: 
Good Read
Geographic coverage: 
Not Global

Whatever happened to trade facilitation?

Release date: 
10/12/2006
Published date: 
09/12/2005

At the turn of the new Millennium international trade facilitation, in the relatively restricted sense of simplification of trading procedures, was a pedestrian activity with few political overtones. A few months later a new and elevated level of inter-governmental, and so commercial, interest was reached in the run-up to the WTO Doha Ministerial Conference and its programmed debate on an additional negotiating “package” of four unfamiliar items including “Trade Facilitation”.

Type: 
Reference Documents
Relevance Degree: 
Good Read
Geographic coverage: 
Not Global

Yes, we have bananas. We just can't ship them

Release date: 
05/22/2006
Published date: 
11/01/2005

Type: 
Explanatory notes
Relevance Degree: 
Useful Background
Geographic coverage: 
Global

Research, Data, and Analysis: Informing Decisions Ahead (2006)

Release date: 
05/03/2006
Published date: 
05/03/2006

The World Bank has a new research project underway focused on expanding knowledge about the relationships between trade costs, private sector growth, and export competitiveness in developing countries. The work program centers on the broad question of how lowering trade-related transactions costs -- and policies to support trade facilitation at the national and international level -- affect poverty reduction and export competitiveness. A major focus centers on an exploration of the dynamic gains associated with lowering trade transactions costs.

Type: 
Reference Reading Tools
Web cast
Relevance Degree: 
Good Read
Geographic coverage: 
Global

Economic Development and Multilateral Trade Cooperation (US$35)

Release date: 
02/10/2006
Published date: 
12/01/2005

How can international trade agreements promote development and how can rules be designed to benefit poor countries? Can multilateral trade cooperation in the World Trade Organization (WTO) help developing countries create and strengthen institutions and regulatory regimes that will enhance the gains from trade and integration into the global economy? And should this even be done? These are questions that confront policy makers and citizens in both rich and poor countries, and they are the subject of Economic Development and Multilateral Trade Cooperation.

Type: 
Reports/Studies
Relevance Degree: 
Good Read
Geographic coverage: 
Global

ARTNeT brief No6 on Trade Facilitation

Release date: 
11/30/2005
Published date: 
11/30/2005

4-page policy brief by UN-ESCAP's ARTNet on the Implementation of Trade Facilitation Measures: Needs, Costs and Other Issues for the WTO Negotiations

Type: 
Explanatory notes
Geographic coverage: 
Global

UNCTAD: Trade and Development Report, 2004

Release date: 
12/03/2004
Published date: 
12/03/2004

From the Report’s Foreword by Mr. Koffi Anan: "This year’s Trade and Development Report is intended as a contribution to the debate on policy coherence. It examines how international trading relations are affected by the international monetary and financial systems, and shows that monetary and financial instability can have a serious impact on the ability of developing countries to participate successfully in the international trading system and reap the benefits of globalization.

Type: 
Reports/Studies
Relevance Degree: 
Good Read
Geographic coverage: 
Global

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