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Policy and performance in customs : evaluating the trade facilitation agreement

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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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    Cited by:

    1. Jaime DE MELO & Ben SHEPHERD, 2018. "The Economics of Non-Tariff Measures: A Primer," Working Papers P212, FERDI.
    2. Harald Oberhofer & Michael Pfaffermayr & Richard Sellner, 2021. "Revisiting time as a trade barrier: Evidence from a panel structural gravity model," Review of International Economics, Wiley Blackwell, vol. 29(5), pages 1382-1417, November.
    3. Lionel Fontagné & Gianluca Orefice & Roberta Piermartini, 2020. "Making small firms happy? The heterogeneous effect of trade facilitation measures," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 565-598, August.
    4. Gnangnon, Sèna Kimm, 2022. "Effect of the duration of membership in the World Trade Organization on Trademark Applications," EconStor Preprints 253266, ZBW - Leibniz Information Centre for Economics.
    5. Utsav Kumar & Ben Shepherd & Roselle Dime, 2018. "Trade Costs, Time, and Supply Chain Reliability," Working Papers id:12826, eSocialSciences.
    6. Isaac Bonuedi & Kofi Kamasa & Eric Evans Osei Opoku, 2020. "Enabling trade across borders and food security in Africa," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(5), pages 1121-1140, October.
    7. 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.
    8. 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.
    9. Badri Narayanan & Sachin Sharma & Mohammad Razzaque, 2016. "Trade Facilitation in the Commonwealth: An Economic Analysis," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 10(3), pages 305-336, August.
    10. Beverelli, Cosimo & Ticku, Rohit, 2022. "Reducing tariff evasion: The role of trade facilitation," Journal of Comparative Economics, Elsevier, vol. 50(2), pages 534-554.
    11. Kikuchi, Tomoo & Yanagida, Kensuke & Vo, Huong, 2018. "The effects of Mega-Regional Trade Agreements on Vietnam," Journal of Asian Economics, Elsevier, vol. 55(C), pages 4-19.
    12. Russell Hillberry & Carlos Zurita, 2022. "Commitment behaviour in the World Trade Organization's Trade Facilitation Agreement," The World Economy, Wiley Blackwell, vol. 45(1), pages 36-75, January.
    13. Volpe Martincus, Christian, 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 7994.
    14. Duc Bao Nguyen & Anne‐Gaël Vaubourg, 2021. "Financial intermediation, trade agreements and international trade," The World Economy, Wiley Blackwell, vol. 44(3), pages 788-817, March.
    15. Terrie Walmsley & Peter Minor, 2020. "Demand shifts and willingness to pay in applied trade models," The World Economy, Wiley Blackwell, vol. 43(6), pages 1499-1520, June.
    16. Bernard Hoekman & Dominique Njinkeu, 2017. "Integrating Africa: Some Trade Policy Research Priorities and Challenges," RSCAS Working Papers 2017/43, European University Institute.
    17. Hayakawa, Kazunobu & Keola, Souknilanh & Urata, Shujiro, 2022. "Using truck probe data to measure border clearance time: evidence from thailand," IDE Discussion Papers 846, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    18. Jayson Beckman & Munisamy Gopinath & Kamron Daugherty, 2021. "Options for ASEAN trade expansion: Within, plus three or six, European Union or the United States?," The World Economy, Wiley Blackwell, vol. 44(5), pages 1177-1204, May.

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