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Trade facilitation and economic development : measuring the impact

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Author Info
Wilson,John S.
Mann, Catherine L.
Otsuki, Tsunehiro

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Abstract

The authors analyze the relationship between trade facilitation, trade flows, and GDP per capita in the Asia-Pacific region for the goods sector. They define and measure trade facilitation using four broad indicators. These are constructed using country-specific data for port efficiency, customs environment, regulatory environment, and electronic-business usage. They estimate the relationship between these indicators and trade flows using a gravity model. The model includes tariffs and other standard variables. The authors find that enhanced port efficiency has a large and positive effect on trade. Regulatory barriers deter trade. The results also suggest that improvements in customs and greater electronic-business use significantly expands trade, but to a lesser degree than the effect of ports or regulations. The authors then estimate the benefits of specific trade facilitation efforts by quantifying differential improvement by members of the Asia Pacific Economic Cooperation (APEC) in these four areas. Based on a scenario in which APEC members below average improve capacity halfway to the average for all members, the authors find that intra-APEC trade could increase by $254 billion. This represents approximately a 21 percent increase in intra-APEC trade flows, about halfcoming from improved port efficiencies in the region. Using Dollar and Kraay's estimate of the effect of trade on per capita GDP, these improvements in trade facilitation suggest an increase in APEC average per capita GDP of 4.3 percent.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2988.

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Date of creation: 31 Mar 2003
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Handle: RePEc:wbk:wbrwps:2988

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Keywords: Transport and Trade Logistics; Trade Policy; Environmental Economics&Policies; Common Carriers Industry; Economic Theory&Research;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  3. Hertel, Thomas W. & Terrie Walmsley & Ken Itakura, 2001. "Dynamic Effects of the "New Age" Free Trade Agreement between Japan and Singapore," GTAP Working Papers 823, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University. [Downloadable!]
  4. Dollar, David & Micco, Alejandro & Clark, Ximena, 2002. "Maritime transport costs and port efficiency," Policy Research Working Paper Series 2781, The World Bank. [Downloadable!]
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  6. Edward Balistreri & Russell Hillberry, 2006. "Trade frictions and welfare in the gravity model: how much of the iceberg melts?," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 247-265, February. [Downloadable!] (restricted)
  7. Caroline L. Freund & Diana Weinhold, 2000. "On the effect of the Internet on international trade," International Finance Discussion Papers 693, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
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  10. Otsuki, Tsunehiro & Wilson, John S. & Sewadeh, Mirvat, 2001. "Saving two in a billion: : quantifying the trade effect of European food safety standards on African exports," Food Policy, Elsevier, vol. 26(5), pages 495-514, October. [Downloadable!] (restricted)
  11. Feenstra, Robert & Markusen, James R. & Rose, Andrew K, 1998. "Understanding the Home Market Effect and the Gravity Equation: The Role of Differentiating Goods," CEPR Discussion Papers 2035, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  1. Yose Rizal Damuri, 2006. "An Evaluation of the Need for Selected Trade Facilitation Measures in Indonesia: Implications for the WTO Negotiations on Trade Facilitation," Working Papers 1006, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada.. [Downloadable!]
  2. Pomfret, Richard, 2007. "Distortions to Agricultural Incentives in Kazakhstan," Agricultural Distortions Working Paper 48360, World Bank. [Downloadable!]
  3. Wieck, Christine & Rudloff, Bettina & Wahl, Tom, 2005. "The Bioterrorism Act of the USA and international food trade: Evaluating WTO conformity and effects on bilateral imports," 2005 Annual Meeting, July 6-8, 2005, San Francisco, California 36292, Western Agricultural Economics Association. [Downloadable!]
  4. Soloaga, Isidro & Wilson, John S. & Mejia, Alejandro, 2006. "Moving forward faster : trade facilitation reform and Mexican competitiveness," Policy Research Working Paper Series 3953, The World Bank. [Downloadable!]
  5. Wilson, John S. & Mann, Catherine L. & Otsuki, Tsunehiro, 2004. "Assessing the potential benefit of trade facilitation : A global perspective," Policy Research Working Paper Series 3224, The World Bank. [Downloadable!]
  6. Suwa Eisenmann, Akiko & Verdier, Thierry, 2007. "Aid and Trade," CEPR Discussion Papers 6465, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  7. Hausman, Warren H. & Lee, Hau L. & Subramanian, Uma, 2005. "Global logistics indicators, supply chain metrics, and bilateral trade patterns," Policy Research Working Paper Series 3773, The World Bank. [Downloadable!]
  8. Institute for International Trade, 2006. "A Comparative Analysis of Trade Facilitation in Selected Regional and Bilateral Trade Agreement," Working Papers 1706, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada.. [Downloadable!]
  9. Bagai, Shweta & Wilson, John S., 2006. "The data chase : what's out there on trade costs and nontariff barriers ?," Policy Research Working Paper Series 3899, The World Bank. [Downloadable!]
  10. Tomasz Iwanow & Colin Kirkpatrick, 2007. "Trade facilitation, regulatory quality and export performance," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(6), pages 735-753. [Downloadable!]
  11. Peter Walkenhorst & Tadashi Yasui, 2004. "Quantitative Assessment of the Benefits of Trade Facilitation," International Trade 0401008, EconWPA. [Downloadable!]
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