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Trade Hallucination: Risks of Trade Facilitation and Suggestions for Implementation

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  • Jeronim Capaldo

Abstract

Official estimates tend to overstate the benefits of trade facilitation and ignore its costs. When all underlying assumptions are brought to light, expecting large gains appears unreasonable. At the same time, estimated employment benefits may easily turn into net losses. With fundamental uncertainty surrounding its effects, implementing trade facilitation without enhancing systems of social protection would be ill advised. Indeed, the net effect of trade facilitation may depend on the social policies it is complemented with. While trade facilitation may bring extra business to import-export firms, it is not a feasible or sustainable growth strategy for all countries and it cannot be expected to deliver growth to the global economy.

Suggested Citation

  • Jeronim Capaldo, 2014. "Trade Hallucination: Risks of Trade Facilitation and Suggestions for Implementation," GDAE Working Papers 14-02, GDAE, Tufts University.
    • Handle: RePEc:dae:daepap:14-02
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    References listed on IDEAS

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    1. Capaldo, Jeronim, 2014. "Trade Hallucination: Risks of Trade Facilitation and Suggestions for Implementation," Working Papers 179115, Tufts University, Global Development and Environment Institute.
    2. Monica Hernandez, 2019. "The Rising Importance of Non-tariff Measures and their use in Free Trade Agreements Impact Assessments," GDAE Working Papers 19-03, GDAE, Tufts University.
    3. Omphemetse S. Sibanda, Sr, 2021. "The Advent of the African Continental Free Trade Agreement as a Tool for Development," Foreign Trade Review, , vol. 56(2), pages 216-224, May.

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