Who profits from trade facilitation initiatives? Implications for African countries

Extensive research has demonstrated the existence of large potential welfare gains from measures to facilitate trade — reduce trade costs — for African countries in particular. However, concerns have been expressed by policymakers regarding the distribution of the benefits and costs of trade facilitation. We use firm-level data for a large number of developing countries, in Africa and the rest of the world, to assess the claims that it will be mostly large firms that benefit from trade facilitation and that trade facilitation may result in a deterioration of the trade balance. We find no evidence for either argument. Our results suggest that trade facilitation can be beneficial in a range of countries, including those that are primarily involved in value chains as suppliers.