Quantitative Assessment of the Benefits of Trade Facilitation
AbstractTrade transaction costs (TTCs) related to border procedures vary depending on the efficiency and integrity of interacting businesses and administrations, the characteristics or kind of goods, and the size and type of businesses. Total costs may be seen as being composed of directly incurred costs, such as expenses relating to supplying information and documents to the related authority, and indirectly incurred costs, such as those arising from procedural delays. Empirical studies suggest that directly and indirectly incurred TTCs each amount to 1-15 per cent of traded goods’ value. Moreover, empirical evidence suggests that TTCs for agro-food products are higher than those for manufactured goods, as agro-food shipments are subject to special border procedures, such as sanitary and phyto-sanitary controls. Also, small and medium-sized enterprises face cost-disadvantages. In light of this diversity in TTCs, the potential for the realisation of benefits from trade facilitation varies across countries, sectors, and types of traders. In cases where best practices are already applied, further efficiency gains will be difficult to achieve. But if border clearance costs are substantially above those encountered under best practices, room for improvement through suitable measures of trade facilitation will tend to exist. The model-based analysis of the economic impacts of trade facilitation carried out in this study differs from earlier research by taking several salient features of import and export procedures into account. In particular, the differing characteristics of direct and indirect TTCs are represented, and country-specific differences in trade facilitation potential are reflected according to empirical information on border waiting times and survey-based evidence on the quality of border processes. In addition, the higher TTCs for agro-food products and small and medium-sized enterprises are incorporated into the analysis. The analysis does not evaluate the economic and trade impact of specific trade facilitation measures or instruments, such as those that might result from a possible future WTO agreement on trade facilitation. Instead, the aim of the assessment is to better represent empirical characteristics of the border process in model-based analysis and to identify those features that crucially affect the results and that, therefore, deserve to be further explored in future analysis. Several scenarios of hypothetical, multilateral trade facilitation efforts are evaluated, focusing on the comparison of scenarios rather than the overall welfare gains that might result from trade facilitation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by EconWPA in its series International Trade with number 0401008.
Date of creation: 29 Jan 2004
Date of revision:
Note: Type of Document - pdf
Contact details of provider:
Web page: http://22.214.171.124
Trade facilitation; customs procedures; documentary requirements; waiting times; CGE modelling;
Find related papers by JEL classification:
- F1 - International Economics - - Trade
- F2 - International Economics - - International Factor Movements and International Business
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-01 (All new papers)
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.:
- 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.
- W. Hertel, Thomas, 2001. "Dynamic Effects of the “New Age” Free Trade Agreement between Japan and Singapore," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 446-484.
- Malcolm, Gerard, 1998. "Adjusting Tax Rates in the GTAP Data Base," GTAP Technical Papers 315, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Wilson,John S. & Mann, Catherine L. & Otsuki, Tsunehiro, 2003. "Trade facilitation and economic development : measuring the impact," Policy Research Working Paper Series 2988, The World Bank.
- Dollar, David & Kraay, Aart, 2001.
"Trade, growth, and poverty,"
Policy Research Working Paper Series
2615, The World Bank.
- Verwaal, Ernst & Donkers, Bas, 2003.
" Customs-Related Transaction Costs, Firm Size and International Trade Intensity,"
Small Business Economics,
Springer, vol. 21(3), pages 257-71, November.
- Verwaal, E. & Donkers, A.C.D., 2001. "Customs-Related Transaction Costs, Firm Size and International Trade Intensity," ERIM Report Series Research in Management ERS-2001-13-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
- David L. Hummels & Georg Schaur, 2013.
"Time as a Trade Barrier,"
American Economic Review,
American Economic Association, vol. 103(7), pages 2935-59, December.
- Alan Matthews & Keith Walsh, 2005. "The Economic Consequences of the Doha Round for Ireland," The Institute for International Integration Studies Discussion Paper Series iiisdp107, IIIS.
- Wilson, John S. & Otsuki, Tsunehiro, 2007. "Regional integration in South Asia : what role for trade facilitation ?," Policy Research Working Paper Series 4423, The World Bank.
- 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.
- Roumeen Islam & Gianni Zanini, 2008. "World Trade Indicators 2008 : Benchmarking Policy and Performance," World Bank Publications, The World Bank, number 6334, March.
- Shepherd, Ben & Wilson, John S., 2009.
"Trade facilitation in ASEAN member countries: Measuring progress and assessing priorities,"
Journal of Asian Economics,
Elsevier, vol. 20(4), pages 367-383, September.
- Shepherd , Ben & Wilson, John S., 2008. "Trade facilitation in ASEAN member countries : measuring progress and assessing priorities," Policy Research Working Paper Series 4615, The World Bank.
- Prabir De, 2009. "Enhancing Asia's Trade: Transport Costs Matter," STUDIES IN TRADE AND INVESTMENT, in: Impact of Trade Facilitation on Export Competitiveness: a Regional Perspective, volume 66, chapter 2, pages 19-70 United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
- Peng Bin, 2009. "Enhancing Export Competitiveness through Trade Facilitation in Asia," STUDIES IN TRADE AND INVESTMENT, in: Impact of Trade Facilitation on Export Competitiveness: a Regional Perspective, volume 66, chapter 1, pages 1-17 United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
- Yue Li & John S. Wilson, 2009. "Trade Facilitation and Expanding the Benefits of Trade: Evidence from Firm Leval Data," Working Papers 7109, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).
If references are entirely missing, you can add them using this form.