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Policy and performance in customs: evaluating the trade facilitation agreement

Russell Henry Hillberry, Xiaohui Zhang, Russell Henry Hillberry and Xiaohui Zhang
Authors registered in the RePEc Author Service: Xiaohui Zhang () and Russell Hillberry

No 7211, Policy Research Working Paper Series from The World Bank

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.

Keywords: International Trade and Trade Rules; Trade Facilitation; National Governance; Government Policies; Youth and Governance; Governance Indicators; Transport Services; Ports&Waterways (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2015-03-10
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