Trade Facilitation and Transport: The Development Dimension

Transcription

1 Trade Facilitation and Transport: The Development Dimension Linking the World Through Learning John S. Wilson Lead Economist, Development Economics Research Group The World Bank

2 Overview Trade Facilitation in Context Economic Growth and Driving Forces Why Barriers and Trade Costs Matter The Link to Transport Services Benefits to Reform and Capacity Building World Bank Research Agenda From Analysis to Action

3 Increased growth across regions (World Bank Global Economic Prospects Report) Real GDP growth, East Asia South Asia East. Eur. & Central Asia -0.2 Latin America Middle East & North Africa Sub-Saharan Africa

4 Productivity is also accelerating.. Decomposition of GDP growth (Average % per annum) Percent High-income countries East Asia and Pacific Europe and Central Asia Latin America and the Caribbean Middle East and North Africa South Asia Sub- Saharan Africa Labor Capital Productivity

5 World trade as a driving force.. 16,000 Merchandise exports ($billion) 14,000 12,000 10,000 8,000 6,000 Other developing China Other highincome 4,000 2,000 United States

6 So Why Focus on Trade Facilitation? Trade Facilitation (transport) Trade Human Development GDP growth

7 Trade Facilitation & Modern Commerce Trade Facilitation in Context Broad Scope From Soft to Hard Infrastructure How Does Services (Transport, Information Technology) Fit in? Infrastructure Services Increasingly Drive Efficiency Gains from Reform? We Know Some about Overall Gains

8 UNCTAD (2001) & Hertel & Keeney 2006) General Equilibrium model: Trade facilitation is a cost reduction Import prices Results for trade and GDP gains UNCTAD: 1% cost reduction yields $3.3 billion in Asia Hertel and Keeney (2006) find gains from improved trade facilitation ($110bn). Full liberalization of goods and services trade ($150bn). No cost estimates for reform, however.

9 Wilson, Mann, Otsuki (2004) Four Concepts of TF Embodied in Four Indicators 1. Port Logistics (air and sea) 2. Customs Environment 3. Regulatory Environment 4. E-business usage (proxy for services infrastructures) Creating Country-Specific Indicators Consistency-- Country-specific information on a consistent basis from multiple sources for each indicator

10 Measuring Trade Facilitation: Data Sources 75 countries: World Economic Forum Global Competitiveness Yearbook Kaufmann, Kraay and Zoido-Lobaton (2002) (KKZ) Policy Question: Inform priority action in capacity building.

11 Raising Capacity Half-way to Global Average $377 billion increase in 75 countries Information Technology 41% Sources of Trade Expansion Port Efficiency 28% Regulatory Harmnization 10% Customs Environment 9% Source: Wilson, Mann and Otsuki (2004)

12 What About the Middle East Region? Need specific analysis to determine costs and reform priorities at the country level. Likely gains from both regional and unilateral reform. Egypt continued problems with high trade costs Standards, regulations, infrastructure, access to IT and telecom services, etc. How does Egypt perform and potential gains?

13 Trade Facilitation Indicators Wilson, Mann, Otsuki (2004) Morocco Tunisia Egypt Jordan Israel United States port customs regulation service

14 Trade Gains with Reform.. Trade Gains from Raising Capacity Halfway to the US Level % port customs regulation services Egypt Jordan Israel Trade gain: (USD mil.) Egypt Jordan Israel Port Efficiency 709 (9%) 378 (9%) 2,973 (5%) Customs Environment 1,173 (14%) 349 (8%) 827 (1%) Regulatory Environment 384 (5%) 162 (4%) 2,485 (4%) Infrastructure (services) 2,072 (25%) 959 (22%) 11,931 (21%)

15 Main Conclusions Evidence indicates trade gains are driven by raising capacity in all four areas but country priorities differ. Unilateral reform promises largest benefit but collective action also matters. New work needed to clarify priorities and include services dimension.

16 What About the WTO Agenda? Negotiations launched in July 2004 on trade facilitation Objectives: Clarify and improve GATT Articles V, VIII, and X Enhance related technical assistance and capacity building Possible new provisions stronger risk management, pre-arrival clearance systems, single window?

17 World Bank Research Moving Forward Bank project funded by the U.K. Department for International Development. Empirical research and analysis on trade costs and facilitation as they affect developing countries. Major focus on understanding the dynamic gains associated with lowering trade transactions costs in developing countries and related reform measures. How does lowering barriers to trade affect poverty reduction and competitiveness?

18 Research and Analysis (1) 1. Sources and magnitude of trade costs: Data on Trade Costs for Empirical Research. Review data on trade transactions costs in developing countries and performance indicators. Identify gaps in harmonized data sets - what new data needed. Workshop on data gaps in areas such as services. International Security, Trade, And Developing Countries. Analysis on costs and benefits of meeting new trade security requirements at the country-level.

19 Research and Analysis (2) 2. Impact assessments of trade transactions costs Papers on trade costs and poverty in developing countries. How do trade transactions costs affect industry export variety? 3. Implications of country characteristics on trade costs -- Small and remote countries. Data collection on trade transactions costs, especially for small remote countries such as; shipping costs. Evaluation of markups and trade costs of selected goods in different countries. Do small remote countries tend to have disproportionately large trade costs?

20 Research and Analysis (3) 4. Types of policy interventions and their impact Trade Agreements, Trade Expansion, and Facilitation. Review provisions in trade agreements (multilateral, regional, and bilateral) that affect costs (customs classification, valuation, and documentation, technical standards, mutual recognition, transport services, etc.) and the empirical literature that has assessed implementation. Development Assistance and Trade: When do TF Projects Work? The relationship between aid, trade, and institutions.

21 An Example Shepherd & Wilson (2006).. How does road infrastructure upgrades affect trade? Sample: 27 Eastern European and Central Asian countries Key Findings: Strong link between road quality and trade $45 billion gain from transport upgrade (net of costs) Could do the same for MENA and Egypt multimodal, road, rail, sea, etc.

22 Next Steps Focus on services and trade costs dynamic gains. Country-level analysis of trade costs and benefit of unilateral and collective action including MENA and country level. Explore related services issues. New collaborative ventures and country work.

23 Thank You John S. Wilson Lead Economist Development Research Group The World Bank