The impact of trade facilitation initiatives on competitiveness
Recent research has repeatedly underscored the link between transport costs, and more comprehensively, total logistical costs, including the time expenditures associated with the movement of the consignment, the impact of regulatory and administrative regimes and procedures, and export flows. More precisely, for labor-intensive manufactured exports—which are a major source of employment generation and revenues for many developing countries—competitive global markets often mean that higher transport costs have to be offset by lower wages for a given product to remain competitive. The obverse, and the implied high elasticity of wages with respect to transport costs, in particular for countries at a geographic disadvantage compared with the location of their prospective markets, has a significant impact on the contribution of economic growth to poverty reduction, and calls for targeted actions to address this issue.
However, the relationship between costs and competitiveness is only one aspect, as increasing and broadening exports reduces the vulnerability of the respective economy to exogenous shocks and increases the potential for knowledge spillovers in specific sectors. In addition, the improved business climate, or the perception of an improvement, can have a positive impact on Foreign Direct Investment (FDI), which itself creates further knowledge spillovers and linkage externalities.
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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 ...
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.
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:
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.
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.
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.
The performance of Asia-Pacific countries in terms of both trade and business facilitation varies greatly. However, with a few exceptions, developing countries in the region have much room for improvement. This paper evaluates the potential contribution of both trade and business facilitation measures to trade and export competitiveness, as well as the potential gains from adopting a more integrated and coherent approach to trade and business (investment) facilitation.
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).
Many trade negotiations involve large cuts in high tariffs, with flexibilities allowing much smaller cuts for an agreed number of politically-sensitive products. The effects of these flexibilities on market access opportunities are difficult to predict, creating particular problems for developing countries in assessing whether to support a proposed agreement.
The onset of the global economic crisis has led to a slump in global demand. However, the extent to which major trading powers have reduced their imports has differed by trading partner. Like financial contagion, could it be the case that countries that are better integrated in the global trading system via efficient trade facilitation environment suffered the most because of their interconnectedness? Using recent data from the US census bureau, this study finds that the efficiency of the trade facilitation environment actually helped to mitigate the effects of the global slump in demand.
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.
Using firm-level data on manufacturing sectors in Africa, this paper addresses how domestic supply constraints and other firm characteristics explain the geographical orientation of firms' exports and the overall market diversification of African manufacturing exports. The degree of market diversification, measured by the number of export destinations, is highly correlated with export intensity at the firm level, and both embody strong scale effects.
This paper briefly reviews new indices of trade restrictiveness and trade facilitation that have been developed at the World Bank. The paper also compares the trade impact of different types of trade restrictions applied at the border with the effects of domestic policies that affect trade costs. Based on a gravity regression framework, the analysis suggests that tariffs and non-tariff measures continue to be a significant source of trade restrictiveness for low-income countries despite preferential access programs.
The New Eurasian Land Transport Initiative (NELTI) was launched in Tashkent, Uzbekistan, on the occasion of an international conference on the development of road freight operations in the Central Asian region, held on 16 September, which gathered representatives from UNESCAP, UNECE, Transport Ministries of European and Asian countries, NGOs and international road transport carriers' associations in the region.
Based on a detailed empirical study, this paper argues that regional liberalization of trucking services has had an important effect on transport costs and tariffs for Zambia’s economy. Zambia is a peculiar example in Southern Africa as it benefits from relatively low transport costs compared with other landlocked countries in Africa. This is mainly because of competition between Zambian and other regional, mainly South African, operators and because of South African investments in Zambia’s trucking industry.
This paper aims to analyse the effect of trade facilitation on sectoral trade flows. We use data from the World Bank’s Doing Business Database on the fees associated with completing the procedures to export or import goods in a country, on the number of documents needed and on the required time to complete all the administrative procedures to import and export. An augmented gravity equation is estimated for 13 exporters and 167 importers using a number of estimation techniques, namely OLS, PPML and the Harvey model.
This paper examines the economic impact of trade facilitation and in particular the link between trade facilitation and trade flows, government revenue and foreign direct investment. It is part of a series of studies that analyse various aspects of trade facilitation and the objective is to contribute to discussions in the WTO Negotiating Group on Trade Facilitation (NGTF) and elsewhere in the trade policy community. The paper finds that improved and simplified customs procedures would have a significant positive impact on trade flows.
Trade facilitation has been a longstanding and traditional feature of GATT, which is expected to have serious implication for developing member countries. This study aims to evaluate the need for and the cost of implementing trade facilitation measures in Nepal in the context of the ongoing WTO negotiation. Nepal initiated market oriented economic reforms in 1985. Trade liberalization under the economic reform was significant. However, trade facilitation has got due attention only in recent years.