Trade Facilitation and the Global Economy by OECD

Author:OECD
Language: eng
Format: epub
Tags: Development/Trade
ISBN: 9789264277571
Publisher: OECD Publishing
Published: 2018-05-29T16:00:00+00:00

The cost to developing countries of implementing trade facilitation measures was a central issue in the WTO negotiations on trade facilitation.1 Unpacking the costs associated with trade facilitation reforms requires taking into the account not only the cost of introducing new measures, but also of sustaining reforms over the longer term. Upfront costs in diagnosing and designing what needs to be done need to be factored in, along with the costs and skills involved in changing laws and regulations. Reforms can involve investments in physical infrastructure, but these have to be accompanied by investments in training staff to operate new technology or perform new processes. A comprehensive and sequenced approach is important: for example, new equipment will not solve problems where policies still require cumbersome processes. Lastly, not all costs are financial: change management, and the associated challenges of changing organisational incentives and behaviours, are an important issue for trade facilitation reforms.

This chapter draws on country experience with implementing trade facilitation to identify and discuss the key cost components and challenges in implementing reforms. Based on work examining the experience of 24 developing and emerging economies, it highlights the extent to which trade facilitation processes can be undertaken in the framework of normal operating budgets and without additional resources, apart from donor support for the areas requiring more technically demanding and complex changes, and longer implementation and familiarisation periods. Overall, implementation and operating expenses are also seen to have been quite limited compared to expected benefits from the reforms.

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