Behind the Border trade and business facilitation:

Transcription

1 Behind the Border trade and business facilitation: Impact on trade and importance of an integrated approach Yann Duval, Trade and Investment Division, ESCAP Emerging trade issues for policymakers in developing countries of Asia and the Pacific: a New Era of Trade Governance, 4-6 March 2009, Manila, Philippines

2 Business Facilitation in Asia-Pacific Average Overall Rank of Ease of Doing Business (EDB) Asia-Pacific Landlocked Countries North and Central Asia (Excl. Landlocked) S Pacific Island South and Southwest Asia (Excl. Landlocked) Southeast Asia (Excl. Landlocked) So East and Northeast Asia (Excl. Landlocked) OECD Member Countries Overall EDB Rank (06/07) Overall EDB Rank (07/08)

3 Trading Across Border (TAB) Facilitation in Asia-Pacific Cost to Export Cost to Import Documents for Export Documents for Import US$ per Container No. of Documents Asia-Pacific Landlocked Countries North and Central Asia Pacific Island South and Southwest Asia Southeast Asia East and Northeast Asia OECD Member Countries

4 Trade vs. Other Business Facilitation

5 What is the impact of trade and business facilitation policies on trade? Extended Gravity model IMPij = f(gdpi, GDPj, Distij, Tariffi, IMPCOSTi, EXPCOSTj, BFRi, BFRj) IMPCOSTi = import costs in country i EXPCOSTj = export costs in country j BFR = Average country rank in Doing Business areas other than Trading Across Border Landlockedness, common border and language dummies added Dataset North/Northeast/South/Southeast Asia + OECD and BRIICS 1 Year: 2006

6 Preliminary Results IMPORT explained by: Baseline Model 2 Model 3 landlockedness(12) *** *** *** distance *** *** *** GDP importer (nomgdp1) 0.947*** 0.949*** 0.837*** GDP exporter (nomgdp2) 1.142*** 1.140*** 1.015*** Tariff (effective, weighted) *** Trade cost - importer (costi1) *** *** *** Trade cost - exporter (coste2) *** *** *** Business facilitation rank - importer (edbwcbi1) *** Business facilitation rank - exporter (edbwcbi2) *** Ease of getting credit - importer (credit info) 1.107*** Protection of investors - importer (disclosure) Contract enforcement - importer (no. of steps) *** Ease of getting credit - exporter (credit info) 0.486** Protection of investors - exporter (disclosure) 0.271*** Contract enforcement - exporter (no. of steps) *** Observations R-squared *** p<0.01, ** p<0.05, * p<0.1

7 Is coherence of trade and business facilitation policies (TBFC) important? Underlying hypothesis: countries that have a more balanced and integrated approach to trade and business facilitation will do better Modeling coherence TBFC i = BFR i -TABR i TABR i : Trading Across Border Rank of Country i BFR i : Average Rank of Country i on other aspects of business facilitation the absolute value of the difference between trade facilitation performance and business facilitation performance

8 Preliminary Results IMPORT explained by: Baseline Model Model 2 Model 3 landlockedness(12) *** *** *** distance *** *** *** GDP importer (nomgdp1) 0.947*** 0.949*** 0.949*** GDP exporter (nomgdp2) 1.142*** 1.140*** 1.132*** Tariff (effective, weighted) *** Trade cost - importer (costi1) *** *** *** Trade cost - exporter (coste2) *** *** *** Business facilitation rank - importer (edbwcbi1) *** *** Business facilitation rank - exporter (edbwcbi2) *** *** Trade and Business Policy Coherence index - importer (absdiffbtbcbi1) Trade and Business Policy Coherence index - exporter (absdiffbtbcbi2) ** Observations R-squared *** p<0.01, ** p<0.05, * p<0.1

9 So, which behind the border policies should be subject to trade agreements? Evidence that business facilitation policies at home and in the partner country matter Regulations beyond those specifically related to international trade do have a significant impact Investor protection Contract enforcement Access to credit Results support broadening coverage of trade agreements (into economic partnership agreements) to address / improve behind-theborder business environment [more generally, it supports ministries in charge of trade being proactive in influencing non-trade policies that have an impact on trade]