Determining trade facilitation performance: the case of South Africa

Abstract

The WTO's trade facilitation agreement emphasises the ease of trading across borders as an important element of international competitiveness, especially in developing countries. This paper investigates trade facilitation performance, with specific reference to South Africa. This study developed a measurement tool for trade facilitation. The study constructs a trade facilitation index (TFI) using a principle component analysis using available data on hard and soft infrastructure components of trade facilitation. The TFI is a tool to compare countries with one another to determine how well they fare in different aspects of trade facilitation. Results for South Africa revealed that South Africa performs well among other SADC countries and BRIC countries, but underperformed in comparison with its top ten international trade competitors. The TFI therefore serves as a useful tool for policy makers, especially in developing countries, who aim to use trade development initiatives to improve those areas that can increase trade performance.