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Trade Facilitation and Its Impacts on the Economic Welfare and Sustainable Development of the ECOWAS Region

Author

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  • Shahrzad Safaeimanesh

    (Department of Economics, Eastern Mediterranean University, Northern Cyprus, via Mersin 10, Gazimağusa 99450, Turkey)

  • Glenn P. Jenkins

    (Department of Economics, Eastern Mediterranean University, Northern Cyprus, via Mersin 10, Gazimağusa 99450, Turkey
    Department of Economics, Queen’s University, Kingston, ON K7L 3N6, Canada)

Abstract

The facilitation of trade is a principal objective in the context of increasing regional trade integration for the achievement of sustainable development goals. The purpose of this study is to estimate the potential annual economic gain to be had from trade facilitation by the coastal countries of the Economic Community of West African States (ECOWAS). These measures would decrease border and documentary compliance time and costs of the administration of international trade. A partial equilibrium welfare economics framework is used that employs sets of export supply and import demand elasticities for each country that are derived using a general equilibrium estimation method. The annual economic welfare gains resulting from the reduction of excessive trade compliance costs for the region are estimated to between US$1.6 billion to US$2.7 billion (2019 prices). This is between 0.24% and 0.42% of the combined GDPs of these countries. The welfare gain is between 6% and 10% of the combined governments’ budgets assigned for education, and is between 33% and 58% of their budgets allocated for health. In the absence of reform, these inefficient practices waste an amount equal to between 15% and 26% of the annual net official development assistance these countries receive.

Suggested Citation

  • Shahrzad Safaeimanesh & Glenn P. Jenkins, 2020. "Trade Facilitation and Its Impacts on the Economic Welfare and Sustainable Development of the ECOWAS Region," Sustainability, MDPI, vol. 13(1), pages 1-22, December.
  • Handle: RePEc:gam:jsusta:v:13:y:2020:i:1:p:164-:d:468634
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    More about this item

    Keywords

    trade facilitation; West Africa; Economic Community of West African States (ECOWAS); regional integration; trade compliance costs; trade reform; economic welfare gains; sustainable development; SDGs 2030;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • D60 - Microeconomics - - Welfare Economics - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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