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Policy and performance in customs : evaluating the trade facilitation agreement

Author

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  • Hillberry,Russell Henry
  • Zhang,Xiaohui
  • Hillberry,Russell Henry
  • Zhang,Xiaohui

Abstract

The 2013 World Trade Organization ministerial in Bali produced a comprehensive framework agreement on trade facilitation. If fully implemented, the agreement should increase the speed and reduce the cost of moving goods across international borders. But which reforms are most likely to improve these outcomes, how much improvement should be expected, and what might such improvements be worth? This paper adopts the Organisation for Economic Co-operation and Development's trade facilitation indicators as quantitative descriptions of trade facilitation policy. It estimates the impact of the indicators and other variables on the time necessary to clear customs, the associated cost, and a customs performance index. Of the 12 policy bundles, the good governance and impartiality indicator is most clearly related to customs clearance time. A move to best practice in all policies by all World Trade Organization members would reduce the predicted time spent in customs by an average of 1.6 days for imports and 2 days for exports. Using a conservative estimate of the value of time in trade, such comprehensive reforms imply a mean tariff equivalent reduction of 0.9 percentage points on imports and 1.2 percentage points on exports. The same estimates are used to calculate welfare gains of policy reform by World Trade Organization members. Reform in China alone accounts for roughly one-fourth of the global benefits from the Trade Facilitation Agreement.

Suggested Citation

  • Hillberry,Russell Henry & Zhang,Xiaohui & Hillberry,Russell Henry & Zhang,Xiaohui, 2015. "Policy and performance in customs : evaluating the trade facilitation agreement," Policy Research Working Paper Series 7211, The World Bank.
  • Handle: RePEc:wbk:wbrwps:7211
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    Citations

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    Cited by:

    1. Fontagné, Lionel & Orefice, Gianluca & Piermartini, Roberta, 2016. "Making (small) firms happy: The heterogeneous effect of trade facilitation measures," WTO Staff Working Papers ERSD-2016-03, World Trade Organization (WTO), Economic Research and Statistics Division.
    2. Utsav Kumar & Ben Shepherd & Roselle Dime, 2018. "Trade Costs, Time, and Supply Chain Reliability," Working Papers id:12826, eSocialSciences.
    3. Christian Volpe Martincus, 2016. "Out of the Border Labyrinth: An Assessment of Trade Facilitation Initiatives in Latin America and the Caribbean," IDB Publications (Books), Inter-American Development Bank, number 96856, February.
    4. Beckman, Jayson & Dyck, John & Heerman, Kari, 2017. "The Global Landscape of Agricultural Trade, 1995-2014," Economic Information Bulletin 265270, United States Department of Agriculture, Economic Research Service.
    5. repec:idb:idbbks:7994 is not listed on IDEAS
    6. Bernard Hoekman & Dominique Njinkeu, 2017. "Integrating Africa: Some Trade Policy Research Priorities and Challenges," RSCAS Working Papers 2017/43, European University Institute.

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