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The economic benefits of trade facilitation: U.S. Customs and Border Protection’s Centers of Excellence and Expertise programme

Bryan Roberts, Fynnwin Prager, Charles Baschnagel, Adam Rose and Brett Shears

The World Economy, 2021, vol. 44, issue 2, 346-366

Abstract: We evaluate the impacts of the Customs and Border Protection (CBP) Center of Excellence and Expertise (CEE) Program on the U.S. trade community. CBP established ten CEEs in order to facilitate trade by removing non‐tariff barriers. CEEs process importers at “virtual” centres as opposed to individual ports of entry, and they are specialised according to particular sectors. CEEs were anticipated to use government resources more efficiently, reduce paperwork, improve information flows and contribute towards a single window for documenting trade. We use difference‐in‐difference (DID) analysis of CBP administrative data to identify the impacts of importer membership in a CEE on key outcomes, including import shipment examination rates and form filings. We also use survey‐generated data on importer administrative and business costs in order to monetise the value of impacts. These data reveal that the cost to importers of having a shipment examined at a port is roughly ten to twenty times higher than the cost of importers having to file a form with a CEE. Estimated impact results suggest that two of the ten CEEs‐‐Electronics and Automotive‐‐had a statistically significant negative impact on examination rates. We review the reasons for these results, which underscore the need when doing an impact analysis for careful understanding of the underlying data and processes involved in order to develop and explain impact results. For the two CEEs that had significant impacts on import examinations, we quantify the monetary value of these impacts and estimate that they saved their members roughly $1 million in trade examination costs in FY 2014. We also estimate that expanding membership to cover more importers could yield savings of between $7 million and $18 million annually. Finally, we find that CBP could redirect approximately 9,000 import examinations and 7,000 form filings from lower‐risk CEE importers to higher‐risk importers, possibly increasing trade‐enforcement effectiveness.

Date: 2021
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Handle: RePEc:bla:worlde:v:44:y:2021:i:2:p:346-366