A Study on Economic Effects of WTO Trade Facilitation : Focusing on G20 Countries

Abstract

The WTO regime has promoted global trade and re-highlighted the importance of trade facilitation by reducing traditional tariff and non-tariff barriers. As the different customs clearance procedure and paperwork, higher complexity and lower transparency in customs were pointed out as the major obstacles in international trade, the WTO has provided the forum for countries to discuss ways to facilitate trade and promote global trade and economic growth. This study conducts a panel study using the gravity model, for which the variables used to indicate trade facilitation are BTE (Border_Transport_Efficient), CE (Customs_Environment), PI (Phys_Infrastruct; for logistical and transport infrastructure) and indicators for the usage of information communications and other related technology in the export/import process. Results showed positive values (+) for all of the trade facilitation variables, indicating that these variables all have the effect of increasing bilateral trade. The trade facilitation variables with the biggest impact were, although slightly different by model, CE and PI. More specifically, a 10% improvement in trade facilitation related to CE was found to bring about a 5% increase in trade in the random model, and a 6% increase in the fixed-effect model.