Trade Facilitation Performance Research Articles

Modelling global value chains: From trade costs to policy impacts

AbstractI use an approach from the family of ‘new quantitative trade models’ to explore the links between trade costs and integration in Global Value Chains (GVCs). The model conceptualises GVC trade through a multi‐country, multi‐sector Ricardian model that nests the standard structural gravity model. It provides a general framework in which to assess the impacts of changes in iceberg trade costs on GVC trade, understood as the sum of backward linkages and pure double counting, in line with recent work on trade in value added. As an example, I use the model to show that observed changes in trade facilitation performance between 2015 and 2019 have strong explanatory power for observed changes in GVC trade during the same period: the model accounts for over one‐third of the observed change, albeit with substantial variation across countries and sectors.

Reducing tariff evasion: The role of trade facilitation

Can simplifying customs procedures reduce tariff evasion? We measure tariff evasion as the mis-representation of import values in response to increasing tariffs. In a dataset covering 121 countries and the whole set of HS6 product categories in 2012, 2015, and 2017, we show that simplifying border procedures, that is trade facilitation, reduces tariff evasion. Holding tariff rate constant at its mean, improving a country’s overall trade facilitation performance from the 25th percentile to the median reduces tariff evasion by almost 20%. The moderating effect is especially due to improving the pre-shipment legal certainty of customs procedures. Among the potential mechanisms, improving trade facilitation performance is effective in reducing tariff evasion due to under-reporting of import prices, as well as in countries with weaker control of corruption. The results suggest that countries can gradually implement trade facilitation reforms to cost-effectively minimize tariff evasion.

The Economic Effects of Free Trading Policies Within an Integrated Economy Between Philippines and the Asean-6 Member States

The analysis of the effects that free trade has within the context of the Philippines and its fellow co-members within the Association of Southeast Asian Nations was purposed as a conduit for greater insight on trade relations between the nations of what is being considered as a fast-growing unified economy. In a more specific lens, the paper identifies how the Philippines and its fellow nations within the bloc conduct free trade while also carefully examining the number of goods that are being imported and exported. The study will use a Quantitative research design to find the changes in exports and imports as well as to point out the association between the dependent and independent variables. The study also determines the effect of trade policy. The research is a cross-country study exclusive to ASEAN-6, namely Brunei, Indonesia, Malaysia, Singapore, Thailand and the Philippines, and the period of the study is from the year 1993 – 2015. The researchers used Ordinary Least Squares and showed a high degree of predictability between the dependent and independent variables. The findings confirm that there exists a significant degree of negative correlation between the import and inflation, tariff and FDI. On the other hand, there is a significant positive correlation between the FDI and import of 4 ASEAN countries, namely Brunei, Singapore, Thailand, and Indonesia, besides a negative correlation between FDI and import of Malaysia. While the tariff and inflation of the Philippines and imports come up with a negative relationship, so this brings us to the conclusion that the independent variables are affected by the policy of free trade but for the good of the economies of the countries involved. With the result of the study, it is expected that further examination of this topic will expound more as the zeitgeist affecting the ASEAN bloc continues to tentatively change. The policy-makers should build an inclusive and sustainable trading system by identifying priorities for improvement and clarifying the design of new trade rules. The policy-makers should also come up with indicators, trade facilitation performance of different countries, information on the level of trade in services restrictiveness, and also records on export restrictions.

Uticaji performansi trgovinskih olakšica na trgovinske tokove u Asocijaciji nacija jugoistočne Azije

The Association of Southeast Asian Nations (ASEAN) considers trade facilitation as a driving force in forming a single market and a single production base. This paper constructs an ASEAN scorecard for measuring the performance of trade facilitation strategic plans by ASEAN member states. Next, a structural gravity model is used in the paper in order to estimate the trade facilitation performance influence on ASEAN trade flows. The fact that the indicator of easing Nontariff Barriers (NTBs) and institutional coordination, on the one hand, and the ASEAN member states' engagement indicator, on the other, had the highest enforcement scores in ASEAN in the period 2017-2019. Those two indicators also exert the biggest influence on ASEAN trade flows, especially ASEAN extra-regional trade.

Infrastructure, trade facilitation, and network connectivity in Sub-Saharan Africa

This paper uses new measures of value added in exports in two sectors (textiles and clothing, and agriculture) to examine the linkages between trade facilitation and infrastructure on the one hand, and value chain participation on the other. It applies network analysis methods to derive a summary measure of value chain connectivity for 189 countries, including 44 in Sub-Saharan Africa. There is a statistically significant association between this measure and summary indicators of infrastructure development and trade facilitation performance. Moreover, it is not only a country's own performance that matters, but also that of its neighbors. The regional dimension of infrastructure and trade facilitation policies is an important determinant of particularly SSA countries' ability to connect to global value chains.

Trade in Health Products: Reducing Trade Barriers for Better Health

Trade in health products has been flourishing in recent years as the demand for better health has been growing throughout the world. At the same time, trade in health products is hampered by substantive trade barriers. In this paper, we present evidence that countries around the world still apply tariffs and nontariff measures that increase prices and limit the availability of health-related products such as pharmaceuticals, vaccines, and medical equipment. The case for liberalizing trade in these products is therefore strong. In addition, we show that improving trade facilitation performance, using the World Trade Organization’s Trade Facilitation Agreement as a starting point, can be linked to improved handling of health-related products such as vaccines which, in turn, would boost usage. In the last part of the paper, we study the price differences for insulin across countries. We observe that the price of insulin has various determinants, one of them being open trade: the higher the level of competition between manufacturers, the lower the price of insulin. In summary, lowering trade barriers on health products can make a substantive contribution to building up health systems and lowering out-of-pocket payments of patients.

Determining trade facilitation performance: the case of South Africa

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.

Determining trade facilitation performance: the case of South Africa

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.

Trade Performance of Asian Landlocked Developing Economies: State of Play and the Way Forward

Despite experiencing a decade of rapid economic and export growth, Asian land-locked developing countries (LLDCs) are still in a difficult position with regard to integration with the rest of the region and the global economy. This paper examines the changes in trade structure and performance of Asian LLDCs. It shows that after a decade-long global commodity boom, most of the Asian LLDCs have become resource-dependent. In addition to their geographical disadvantages, the reasons for high trade costs in LLDCs include trade barriers and service trade restrictions as well as poor trade facilitation performance. However, as those factors are related to policies, reforms in the right direction could mitigate economic challenges facing Asian LLDCs. This study also underscores the importance of global and regional cooperation efforts to assist those countries in enacting sound trade policies and strategies that put structural economic transformation at the centre of such efforts.

Trade facilitation in ASEAN countries: harmonisation of logistics policies

This paper studies the effectiveness of the implementation of trade facilitation measures in member countries of the Association of Southeast Asian Nations (ASEAN). We evaluate trade facilitation performance and indicate trade facilitation needs and priorities that vary between ASEAN members. In particular, we examine logistics-related costs in ASEAN and whether the current level of logistics-related costs could be a burden or an advantage for ASEAN countries. We also identify critical barriers that have impacts on logistics services related to foreign investment and customs across ASEAN. Finally, we propose recommendations for the harmonisation of logistics policies in ASEAN countries aimed at the development of the ASEAN Economic Community.

Trade Costs in the Developing World: 1996–2010

AbstractWe use new data on trade and production in 167 countries to infer estimates of trade costs for manufactured goods and agriculture for 1996‒2010. Trade costs are strongly declining in country income level. Among developing countries, only the upper middle income group has been successful in reducing trade costs faster than elsewhere in the world. Sub-Saharan African countries and low income countries remain subject to very high trade costs. Regional trade agreements, maritime transport connectivity, and trade facilitation performance are important determinants of trade costs.

Global Value Chain and Trade Facilitation: The Case of Bangladesh Apparel Industry

The study focuses on the apparel sector developments and trade facilitation performance of Bangladesh, and analyzes the dynamics and interplays in-between them. Presentations are based on both primary data, collected mainly from interviews of relevant public and private sector representatives in Bangladesh, and secondary data, compiled from different international and national trade databases and available literature. Starting off in the 1980s, Bangladesh quickly jumps up the apparel value chain (AVC) to be the biggest sourcing country worldwide only next to China. However, low entry barriers in the AVC, dependence on imported inputs, rise of the cut-throat competitors including the South-Asian and South-East Asian countries, constant increase in the labour prices, compliance concerns and dismal trade facilitation performance are offering the biggest challenges for the sector. The most challenging factor has been the time and cost of trading across borders, which is sometimes more than double than those of its competitors in Asia. The higher trading cost and time, faced by the businesses twice while importing inputs and exporting the finished goods, is neutralizing and eliminating the other comparative advantages Bangladesh has over its competitors. The study found that Bangladesh has potentials to drastically improve its trade facilitation performance which will significantly reduce its trading cost and time and enhance its competitiveness to maintain dominance in the global apparel market. The WTO Agreement on Trade Facilitation (ATF) 2013 offers both challenges and opportunities in this regard. If properly utilized, it may play a really important role in facilitating realization of the trade facilitation and apparel sector goals of Bangladesh.

Trade Facilitation in ASEAN Members - A Focus on Logistics Policies Toward ASEAN Economic Community

This paper studies the effectiveness of the implementation of trade facilitation measures in ASEAN member countries in comparison with these measures in other regional organizations. We evaluate trade facilitation performance and indicate trade facilitation priorities and needs that are different between ASEAN members. More specifically, we examine logistics-related costs in ASEAN and figure out how the current level of logistics-related costs could be a burden or an advantage for ASEAN countries. Then, we identify some critical barriers which have impacts on logistics services which are related to foreign investment, customs and mode-specific across ASEAN. Although most of the barriers are based on logistics unfriendly practice, “specific policy measures would help member countries to reduce the impact of these barriers to logistics services.” (Gupta et al, 2011) The ultimate goal of this research is to propose implications and recommendations for harmonization of logistics policies in ASEAN countries toward AEC.Studies on trade facilitation have been conducted for the Asia-Pacific in general. However, no such specific research has been conducted for ASEAN. Per se, this research aims to find out the factors that promote trade facilitation and assess several costs for logistics services in ASEAN. The research also examines the main inhibitors to trade liberalization in ASEAN, and hence, carries practical implications for ASEAN. The critical barriers to trade liberalization as examined in this paper are valuable for ASEAN for implementing and fine-tuning appropriate policies toward the AEC.

Trade Facilitation in ASEAN and ASEAN+1 FTAs: An Analysis of Provisions and Progress

Regional trade agreements concluded in recent years have increasingly included provisions on trade facilitation. Although ASEAN 1 FTAs vary in their scope, specificity and depth of commitments on trade facilitation, they tend to cover several core areas and affirm the application of international agreements, standards and instruments. A review of trade facilitation performance through a constructed Core Trade Facilitation Index shows that there are great disparities among ASEAN countries and their FTA partners. In considering the treatment of trade facilitation in a regional comprehensive economic partnership between ASEAN and its dialogue partners, attention could be given to defining a consistent set of trade facilitation principles, adopting specific measures, monitoring performance, implementing capacity-building measures and keeping abreast of developments in multilateral negotiations on trade facilitation.