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Trade FacilitationAnd Economic Development
Development Research Group
The World Bank
John S. Wilson
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Bank Trade Logistics Agenda
• Policy relevant research and diagnostics– New analysis and data
• Bank operations – Review and support
• Strengthen partnerships – GFP
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Overview
• Trade Facilitation – More than Transport
• Security and Trade - Potential Win-Win
• Framework for Capacity Building Needed
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Trade Facilitation: What Impact?
• Bank research – Wilson, Mann, Otsuki 2003
• New dataset – 19 APEC members
• Econometric approach – gravity model
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Four Indicators of Trade Facilitation
1. Port Efficiency
2. Customs Environment
3. Domestic Regulatory Environment
4. E-business usage
Survey Data:• World Economic Forum Global Competitiveness Report
(GCR)• IMD Lausanne, World Competitiveness Yearbook (WCY)• Micco, Ximena and Dollar (2001), Maritime Transport Costs
and Port Efficiency, World Bank Group (MXD). • Transparency International
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Raising Capacity Half-Way to APEC Average
Change in Trade Flow ($ billion)
Change in Trade Flow (%)
‘Border’ Measures
Port Efficiency 116.89 9.7 Customs Environment
Bring below-average members up to the APEC average
21.63 1.8
‘Inside-the Border’ Measures
E-business Bring below-average members up to the APEC average
27.69 2.3
Regulatory Environment
Regulatory Harmonization
88.15 7.3
Grand Total 254.36 21.0
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Policy Relevance and Next Steps
• Inform capacity building priorities– Collective action and unilateral
• New research – World Bank GEP 2004– Analysis expanded to 75 countries– Revised data input
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Terrorism and Trade: Economic Impact?
• Doubling of terrorist incidents 1968-1979 led to a 6% decrease in bilateral trade between targeted economies (Nitsch and Schumacher, 2002).
• Security promotes investment and growth in developing economies Poirson (1998). Private investment rose 0.5 to 1 percent of GDP in countries that adopted security measures in ‘best practice’ regions. Economic growth rose by 0.5 to 1.25 percent per year.
• World welfare declines by $75 billion – 1% increase in trade costs (Walkenhorst and Dihel 2002).
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Security Considerations….
• Necessary to ensure that less developed countries are not excluded from benefits of new security programs.
• Potential win-win situation - higher costs can be recovered through greater efficiencies in the supply chain and increased exports.
• Need coordinated multilateral plan.
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Impact of WTO Rules?
• New analysis in Wilson, Otsuki, Mann to include estimates of potential gains.
• Trade system limited impact.
• Main engine of economic growth – long-term development strategy.
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Conclusions…..
• Trade facilitation.– More than transport.– Development context central role.
• Policy decisions demand new data and indicators to ensure sound policy decisions.
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Thank You
John S. Wilson
Lead Economist
Development Research Group
International Trade
The World Bank
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