Measuring the economic impact of trade facilitation

Definition

The measurement of the economic impact of the implementation of trade facilitation initiatives.

Overview

There is a limited amount of empirical work that endeavours to quantify the economic benefits of trade facilitation initiatives, and nearly all that has been done employs econometric models to try and predict, at a macro, or global level, the benefits of some broad facilitation initiative, such as policy or regulatory reform. Most of the substantive work of this type, so far, has been undertaken in cooperation with APEC, with the intention that it would represent a step towards providing policymakers with a tool to assess the impact of such measures on trade flows. Fine tuning these models will be valuable in helping structure the policy dialogue with Governments by bringing to the table robust arguments that contain a quantification of the potential economic benefits from the broad policy or regulatory measures.

However, the coupling of these broader 'macro' tools with both the Trade and Transport Facilitation Audits, and other disaggregate microeconomic assessments, focusing on the allocative impact of specific trade facilitation initiatives in certain sectors, where there has been little empirical work at present, would make it possible to:

  1. Identify the main facilitation hurdles in the external trade procedures of a given country, using the audit
  2. Quantify the impact of clearing certain impediments at a macro level
  3. Provide an indication of the net benefits of specific measures at a micro-level.

These tools together would provide a rich source of information on the costs and benefits of the removal of impediments, at a number of different levels.

Where to Start

Join the effort!

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 ...

 

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How to join: 

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

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How to join: 

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

Periodicity: 
annual
Geographic coverage: 
Global

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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: 
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Global

Export performance and trade facilitation reform : hard and soft infrastructure

Release date: 
06/22/2010
Published date: 
05/04/2010

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

Behind the Border Trade Facilitation in Asia-Pacific: Cost of Trade, Credit Information, Contract Enforcement and Regulatory Coherence

Release date: 
06/20/2010
Published date: 
05/20/2009

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.

Type: 
Reports/Studies
Relevance Degree: 
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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).

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Release date: 
06/20/2010
Published date: 
04/02/2010

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.

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Time as a determinant of comparative advantage

Release date: 
11/16/2009
Published date: 
06/19/2010

It is assumed that added time to export adds cost to and lowers the volume of trade. Time delays may also affect the composition of trade and can disproportionately reduce trade in time-sensitive goods. This paper investigates the validity of these propositions using the World Bank Doing Business database and Enterprise Surveys for 64 developing countries. The authors find that in countries where there is longer time needed to export firms in time-sensitive industries are less likely to become exporters. Moreover, firms that do export have lower export intensities.

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Working Papers
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Global economic crisis and trade: the role of trade facilitation

Release date: 
05/19/2010
Published date: 
06/19/2010

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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

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

As tariffs and non-tariff barriers (NTBs) fall attention has shifted to trade facilitation, both in the WTO and in regional arrangements such as ASEAN or APEC. Economists have, however, been slow to develop convincing measures of trade costs. Commonly cited estimates of the border effect or of trade costs are huge, but flawed. The gap between CIF and FOB values of trade is the best aggregate measure, but suffers from lack of consistent data.

Type: 
Reports/Studies
Relevance Degree: 
Good Read
Geographic coverage: 
Not Global

Trade costs and facilitation in APEC and ASEAN: Delivering the goods?

Release date: 
01/18/2010
Published date: 
06/18/2010

This paper uses a new methodology to provide some first evidence on the overall level of trade costs in APEC and ASEAN. On average, APEC member economies have met the Shanghai target of a 5% reduction in trade costs over five years, but only just. Performance of individual member economies varies substantially, and in some cases is far below the Shanghai target. ASEAN member countries have also experienced some declines in trade costs, but generally to a lesser extent than in APEC. In both groups, tariff reductions have played an important role in reducing overall trade costs.

Type: 
Working Papers
Relevance Degree: 
Useful Background
Geographic coverage: 
Not Global

Trade Facilitation in Developing Countries

Release date: 
06/28/2009
Published date: 
06/28/2008

This paper addresses four issues. First, Section 2 provides a broad review of the types of costs addressed under TF and how these relate to trade, and second,considers evidence on the effects of improvements in TF (e.g. on trade flows or revenue efficiency). Third, Section 3 gives some examples of particular measures to improve TF, illustrating how effective such reforms can be, typically increasing revenue and collection efficiency and reducing Customs clearance times.

Type: 
Reports/Studies
Relevance Degree: 
Useful Background
Geographic coverage: 
Global

Domestic constraints, firm characteristics, and geographical diversification of firm-level manufacturing exports in Africa

Release date: 
01/19/2009
Published date: 
03/01/2008

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.

Type: 
Working Papers
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Good Read
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Trade policy, trade costs, and developing country trade

Release date: 
12/18/2008
Published date: 
01/18/2009

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.

Type: 
Working Papers
Relevance Degree: 
Must Read
Geographic coverage: 
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Trade costs in Africa : barriers and opportunities for reform

Release date: 
01/18/2009
Published date: 
09/16/2008

This paper reviews data and research on trade costs for Sub-Saharan African countries. It focuses on: border-related costs, transport costs, costs related to behind-the border issues, and the costs of compliance with rules of origin specific to preferential trade agreements. Trade costs are, on average, higher for African countries than for other developing countries. Using gravity-model estimates, the authors compute ad-valorem equivalents of improvements in trade indicators for a sample of African countries.

Type: 
Reports/Studies
Working Papers
Relevance Degree: 
Good Read
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The impact of regional liberalization and harmonization in road transport services : a focus on Zambia and lessons for landlocked countries

Release date: 
05/01/2008
Published date: 
01/22/2008

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.

Type: 
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Relevance Degree: 
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